OT- Contractor

[phiscock-g851W1bGYuGnS0EtXVNi6w at public.gmane.org]

OK, here's the definitive (Canada Revenue Agency) word on HST: you
*cannot* apply for an ITC (input tax credit) on capital property. That is,
you pay out the HST when you purchase the equipment, and you can't get a
refund of the HST later. That's the same as the existing situation with
HST. You *can* apply for an ITC on supplies, which is the same as the
existing situation.

You *can* of course apply the depreciation of the equipment as an expense
against your company income. I notice that they upped the depreciation
rate for computers, substantially. So you can completely write off a
computer in a few years.

Here's what it says:
=======================================================================

Effect of HST
-------------

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/bspsbch/itc-cti/hwt/cnntclm-eng.html


Purchases and expenses for which you cannot claim ITCs

There are some purchases and expenses for which you cannot claim an input
tax credit (ITC) such as:

    * certain capital property (for more information, see ITCs for Capital
property);

----------------------------------------------------


Capital property

Capital property for GST/HST purposes means the same as for income tax
purposes subject to a few exceptions. It is:

    * any depreciable property. This means property that is eligible or
would be eligible for a capital cost allowance (CCA) for income tax
purposes; and
    * any property, other than depreciable property, from which any gain
or loss if you disposed of the property would be a capital gain or
capital loss for income tax purposes.

Capital property is property you buy for investment purposes or to earn
income. It may include capital real property such as land or a building,
or capital personal property such as equipment or machinery that you use
in your business.

Other examples of capital personal property include:

    * photocopiers, computers, and cash registers;
    * furniture and appliances to furnish places such as offices, lobbies,
and hotel rooms; and
    * free-standing refrigerators, ovens, and other large appliances
(built-in appliances are fixtures that are usually considered to be
part of the real property).




-- 
Peter Hiscocks
Syscomp Electronic Design Limited, Toronto
http://www.syscompdesign.com
USB Oscilloscope and Waveform Generator
647-839-0325

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