The Tax Rate(s) Applied on the Invoice in Canada
The tax rate is the percentage applicable to the value of goods sold. It is a consumer tax and is therefore applied to the value of goods sold. The primary mechanism of the application or calculation of tax:
Price inclusive of tax = Price exclusive of tax * (100 + tax rate) / 100
Price exclusive of tax = Price inclusive of tax / (100 + tax rate) * 100
Tax rate = (Price inclusive of tax / Price exclusive of tax - 1) * 100
The federal tax rate (GST) in Canada is 5%, however the final tax rate (HST) is province based for the following regions: Ontario(13%), New Brunswick(15%), Newfoundland and Labrador(15%), Prince Edward Island(15%) and Nova Scotia(15%).
Some categories of products or services may have reduced tax rates or to be exempt from tax.
Invoicing tools for Canada: