NewViews is equipped to handle value added taxes, such as the Canadian Goods and Services Tax (GST/HST) and the UK's VAT. These taxes are managed on a real-time basis, and in sufficient detail to accommodate all reporting requirements. This chapter deals specifically with GST/HST, however all examples and procedures are applicable to VAT as well.
In Canada, the GST report or HST report is required by the CRA on a specified schedule. Most business are required to file quarterly, with larger businesses having to file monthly.
The report is of a periodic nature, i.e. you are required to provide the organization's total Sales, total GST/HST collected (line 105) and total ITCs (Input Tax Credits, line 108) for the specified period. The report needs to be filed within 30 days of the period end.
The CRA assumes that all bookkeeping and accounting functions have been completed by the time the report is filed, but this is usually not the case. Many supplier invoices arrive late, there may be postal disruptions, prior period adjustments may not be posted for several months (e.g. yearend adjustments), and many invoices are dated for services provided in the prior month, e.g. utility invoices. To give a true picture of profit, the expenses must be posted within the date range that these expenses occurred, and not necessarily the date the expense invoice arrives. Most organizations use the accrual method of accounting and do their best to match revenue to expenses within the same period, which may lead to back dating transactions more than 30 days old.
So how do we provide a valid report to the CRA within 30 days that captures all activity for the period, including activity that was back dated to the prior period?
The solution is to use both periodic and perpetual date ranges to arrive at the values for the current period. There are two methods to achieve this: