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If your company is not based in the United States (or even if they are!) there are business mysteries behind banking and taxation that don’t exist in many other places and sometimes don’t seem to make a lot of sense. A lot of those requirements originate from state and federal level regulations. This blog series will uncover what those mysteries are and how to understand them as systems that can be easily managed with Dynamics NAV and Dynamics 365 Business Central.
Canada uses a different system of taxation called the Goods and Services Tax (GST) which is maintained at the Federal level. This tax applies 5% on most Canadian goods and services. This regulation was intended to streamline the Canadian tax system, but not all provinces complied, and some still require Provincial Sales Tax (PST) returns to be filed. In addition to this, there is the Harmonized Sales Tax (HST) which is used by provinces that did combine their provincial level taxes with the federal level taxes. Just like in the US, there can also be product-level tax exemptions related to both GST and PST, and company level exemptions for charities, nonprofits, schools, and government entities.
The Canada Revenue Agency assigns a set of codes to track all the necessary information. These codes, called the General Index of Financial Information (GIFI) are assigned at the level of the general ledger account, and the data follows along with the financial reporting.
Using software like Dynamics NAV and Dynamics 365 Business Central can help with tracking all these rules. These are our recommended best practices for using this software to collect and remit tax correctly.
If you’d like some help with de-mystifying business processes and correct system setup related to US-based accounting practices, please get in contact with us to discuss how New View Strategies can help. We have specialists with deep accounting expertise in using Dynamics NAV and Dynamics 365 Business Central who can move quickly through the requirements for your company and establish clear and accurate processes to manage these complex business needs.
Looking for more topics related to US-based accounting? Check out the rest of our related blogs at the links below.