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Mike_QOB
January 14, 2022
Question

Sales tax Category

  • January 14, 2022
  • 1 reply
  • 0 views

Hello everyone,
I was wondering what is the difference between out of scope, exempt & Zero-rated.
They all seem to give the same value. However, if I understand correctly out of scope is for unrelated transactions such as "between account transfers", payroll or tax payments. Maybe I am wrong!
But exempt and zero-rated seem the same thing to me!
I would appreciate it if you could help me on this matter...

 

Thanks,

1 reply

R
Rasa-LilaM
January 14, 2022

Thanks for joining the Community today, Mike_QOB.


I’m here to provide clarifications about the tax codes mentioned above.


The Out of Scope tax code is assigned to transactions that are not subject to GST and have no impact on your tax liability or returns. Also, the zero-rated tax codes are products and services that are taxable at a 0% rate.


While Exempt applies to supplies of property and services that are not subject to the GST/HST and the registrants are unable to claim input tax credits to recover the mentioned taxes. For more details, check this article: General Information for GST/HST Registrants.


This reference provides a detailed list of the tax rates and codes where your company is located: Common sales tax codes.


Keep me posted if you have additional questions about taxes and codes. I’ll be glad to lend a helping hand. Enjoy the rest of the day.

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