GST total paid and GST total invoiced that has to be paid back

[Cam Ellison]

Nicholas Lee wrote:
> On 4/4/06, *Cam Ellison* <cam at ellisonet.ca <mailto:cam at ellisonet.ca>> wrote:
> 
>     I actually use 3 Liability sub-accounts, like this:
> 
>     Liabilities
>        |
>        --GST
>           |
>           |--GST Collected  (from clients)
>           |--GST Paid  (paid for goods and services)
>           |--GST Payments  (paid to CRA)
> 
>     Instead of entering the GST you pay for goods and services as
>     Expenses|Taxes|GST, enter it as Liabilities|GST|GST Paid, and so on.  It
>     will automatically show as a negative (and so will GST Payments).  Your
>     accountant can undoubtedly give you a better explanation than I can.
> 
> 
> If Canada uses a similar system to NZ, GST is purely a transactional 
> tax. So its never (or hardy ever) an expense.  You are only acting as an 
> agent for the tax man. Thus you simply track your liability to the tax man.
> 
> The end users pay the tax, and thus it is not an expense.

To the best of my knowledge (a firm I worked for had to deal with NZ 
taxes, from which foreign consultants [unlike in Canada] are - or were - 
not exempt) the situation is identical, and the same applies to Australia.

Cam


--
Cam Ellison, Ph.D. R.Psych. #1417

Cam Ellison & Associates Ltd.
RR 22       3446 Beach Avenue
Roberts Creek BC      V0N 2W2
Phone:           604-885-4806
Fax:             604-885-4809