An exempt supply is a good or service on which no GST/HST is charged and for which the supplier cannot claim input tax credits, unlike a zero-rated supply.
Exempt supplies carry no GST/HST, but crucially the supplier cannot claim input tax credits on the costs of making them, so the tax paid on inputs becomes an unrecoverable cost. This is the key difference from zero-rated supplies, which are also tax-free to the customer but do allow input tax credits.
Common exempt supplies include most health and dental services, financial services, residential rent, and many educational services. Businesses making exempt supplies are effectively outside the GST/HST recovery system, which affects pricing and whether registration is even worthwhile.
A residential landlord's rent is an exempt supply: no HST is charged to tenants, but the landlord cannot recover the HST paid on maintenance and repairs, so that tax becomes a real cost of doing business.
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Property tax is an annual municipal levy on real estate, charged by the city or town where the property sits rather than by the CRA. The bill is the assessed value of the property multiplied by the tax rate the municipality sets each year, and it funds local services such as roads, waste collection, policing and the education portion the province adds. Assessed value is set by a provincial assessment authority, so it is not the price you paid.
Yes, the CRA does telephone people, usually about a balance owing, a missing return, an audit or to verify information, and calls can come from many different numbers, so caller ID proves nothing either way. A real agent never demands payment by gift card, cryptocurrency or e-transfer, never threatens immediate arrest or deportation, and never asks for a password. If a call feels wrong, hang up, check your balance and mail in My Account, then call back using a number from canada.ca.
Residents are taxed on worldwide income, self-assessed on a return you file yourself. Add up income, subtract deductions to reach taxable income, apply the federal and provincial brackets in steps, then reduce the result by non-refundable credits and by tax already withheld or paid by instalment. The difference is your refund or balance owing, which the CRA confirms on a notice of assessment and can later review or reassess.
Taxable income is built in steps. First add every source of income for the year, including employment, self-employment, pensions, investment income and the taxable portion of capital gains. Then subtract permitted deductions such as RRSP contributions, union dues, child care costs and deductible support payments to reach net income, and subtract the remaining deductions to reach taxable income. Tax is calculated on that figure using the federal and provincial brackets, and credits then reduce the tax itself.
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Reviewed and fact-checked by Udit Gupta
Ex Big 4 — Ernst & Young, Deloitte · International & cross-border tax specialist · CPA Canada (In-Depth Tax Program) · Chartered accountant, ICAI & MIA
Udit Gupta has over 15 years of experience helping corporations and business owners with corporate structuring, corporate tax filing, bookkeeping, payroll, GST/HST, cross-border tax and CRA representation. Big 4 trained at Ernst & Young and Deloitte, and qualified as a chartered accountant in India and again in Malaysia, he founded his accounting practice in 2014 to serve entrepreneurs, startups and non-resident business owners across Canada. View full member bio.
The Institute of Chartered Accountants of India — member 521458 · Malaysian Institute of Accountants — member CA 44667 · Ex Big 4: Ernst & Young, Deloitte · CPA Canada (In-Depth Tax Program), completed 19 Dec 2023 · In-Depth GST/HST Part I, 12 Jul 2022 · Part II, 5 Jul 2023
Editorial policy. Every page is researched against primary sources — the Income Tax Act, CRA publications and CPA Canada guidance — and every rate or threshold is stated with the tax year it applies to.
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