Sales Taxes for Video Producers
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Agenda
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Introduction & disclaimer
Two sales taxes that you must understand
Why should you care?
GST / HST
PST
Q&A
Sales Taxes for Video Producers
Jim Westwell, CGA - experienced in the
film & television industry
 I am NOT a tax practitioner
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I will share my experiences and past practices
to help put things in context
This session is for general information and
discussion
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You should seek professional advice or do your
own research for specific issues
Ask for a guidance from tax help lines
Two sales taxes that you must
understand:
GST - Goods & Services Tax - Federal
 PST - Provincial Sales Tax - Province of BC
 Why should you care?
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Failure to comply can cost you BIG BUCKS
 Imputed
- All taxable sale will be assessed as if you
charged on a tax included basis
 Heavy penalties and interest for 3 years retroactive
GST - Goods and Services Tax
A “value added tax” - Hits the supply chain
 Federal jurisdiction - Canadian territory
 Applies to most good &/or services
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Exceptions:
 Payroll
 Basic
Groceries
 Medical & Dental Services
 Financial Services & Interest
 Insurance & residential rents
GST -Goods and Services Tax
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Almost everyone pays the GST - No
Exemptions
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Except for “0 Rated” sales such as exports (and
above exceptions)
 If
you ship a finished DVD to a customer outside of
Canada - No GST
 If you only supply services to a foreign client in
Canada - Charge GST
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Place of service rules
GST -Goods and Services Tax
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Final GST liability is with the final
consumer of the product or service
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All others who pay GST along the supply
chain can claim GST paid or incurred as an
Input Tax Credit (ITC)
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Supply chain vendors MUST be registered for
GST to claim Input Tax Credits
GST -Goods and Services Tax
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Registration requirements:
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If you charge GST
If you have revenues of $30,000 per year
If registered you must charge and remit
GST on all sales
 You can opt to file tax returns
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Monthly
Quarterly
Annually
GST -Goods and Services Tax
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Accounting records must be kept
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Record all sales and taxes charged thereon
Record all expenses and GST paid thereon
Record all Capital (Equipment & Software)
purchases and GST paid thereon
Your records can be your best friend or
worst enemy
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Do them right and DO NOT cut corners
You will eventually be audited so be ready
GST -Goods and Services Tax
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Receipt requirements
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$30.00 (including all taxes) or over:
 Amount
of GST or statement that GST is included
and identification of items taxed
 Supplier’s GST registration number
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$150 or over:
 Above
requirements
 Purchaser’s name
 Terms of payment
 Description to identify each item
GST -Goods and Services Tax
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Tax returns
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File on time and stay off their radar
Report all sales for the period even if you have
not collected the receivable
Calculate the total GST charged for the period
(collected or not)
Calculate total GST incurred (Input tax Credit)
for the period (paid or not)
Pay or claim a refund on the difference
GST -Goods and Services Tax
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“Quick Method”
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Annual sales (including tax) under $200,000
No need to account for GST Input Tax Credits
Remit a flat percent of sales plus tax:
 4%
of first $30,000 of sales including GST tax
 5% on remaining sales and GST billed
 You keep the difference
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Can still claim Input Tax Credits on capital
items - such as cameras, software & computers
GST -Goods and Services Tax
Example of “Quick Method”
 Annual sales & tax -50,000+3,500=$53,500
 Remit:
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4% on first
$30,000 = $1,200
5% on remaining 23,500 = 1,175
Total tax paid
$2,375
Total tax collected
3,500
Net Input Tax Credit
$1,125
GST -Goods and Services Tax
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Harmonized Sales Tax - HST
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All GST registrants must collect and remit 15%
of “taxable supply” in:
 Nova
Scotia
 New Brunswick
 Newfoundland & Labrador
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Same rules as GST
Make payment s to CRA
GST -Goods and Services Tax
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Self-assessment
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Any goods that you have taken from the
business on which as an ITC has been claimed
Any goods and services that you import into
Canada that were not taxed at the border
 Space
on the tax form to report & offset against
other tax issues
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Beware: This is a standard target of opportunity
for GST auditors
PST - BC Provincial Sales Tax
Retail Sales Tax
 Applies to sale or lease of “Tangible
Personal Property “(TPP)
 All “Vendors” of “TPP “ must register &
collect PST on sales of their product
 Also applies to some “Taxable Services”
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PST - BC Provincial Sales Tax
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Exemptions apply to materials that become
a component part of the finished product
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DV tapes (assuming that the client gets them)
DVD blanks & cases
Ribbons & labels
DVD case cover paper and toner or ink
Other exemptions include groceries, books,
bicycles, and services
PST - BC Provincial Sales Tax
Bulletin SST 053 specifies “Videotaped
Events”
 Requires tax on ALL “charges that the
customer must pay to acquire the video
tape”
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Travelling expenses
Labour
Other amounts
PST - BC Provincial Sales Tax
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Video producer must pay PST on his/her
“purchases for business use”
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Cameras, lighting, microphone & tripods
Computers, software and printers
Office furnishings, supplies and overhead
Camera repairs (“taxable services”)
PST - BC Provincial Sales Tax
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Bulletin SST 076 may apply if
videographer services a “Motion Picture”
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May be exempt from charging PST for services
if he supplies “Owner Operated Equipment”
Contract must specify responsibility for
operating the equipment
PST - BC Provincial Sales Tax
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Self-assessment required:
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On all purchases outside of BC (if not taxed or
exempted)
All purchases in BC that were not otherwise
taxed or exempt
Exempt goods for resale that are later used for
personal or business use
This is a favourite area for auditors so play
it straight
PST - BC Provincial Sales Tax
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Accounting records and tax returns
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Same basic rules as for GST
Summary
Sales taxes are a serious matter
 Ignorance of the requirements is NOT a
defense
 If you are in business,
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Know what is required to comply with sales tax
laws and regulations
Run your business accordingly
Final Words of Advice
Retroactive taxes, penalties and interest can
KILL your business and put you into
personal bankruptcy so don’t fool
around.
 Be honest and the auditors will lose
interest in you
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Thanks for your attention.
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Questions and Comments