UBC Expense Reimbursement - GST Procedures For use with UBC forms TR REQ (AP501 - Rev. 04/99) and Q Req (AP500 -Rev. 03/98) Attached Schedules: I tes and General Information II Summary of Sales Tax Status of Travel Expenditures III Summary of Sales Tax Status on n-travel Expenditures IV Flowchart of Procedural Steps for GST Calculation Step 1. Will this expense report be used to reimburse travel expenses or general expenses (i.e. non-travel expenditures)? Travel reimbursement Go to step 2 (TR Req) General expense reimbursement Go to step 9 (Q Req) Step 2. Where is the travel destination? Outside rth America - Go to Step 3 rth America - Go to step 4 Step 3. Travel Outside of rth America (Estimated GST recovery on Canadian expenditures other than airfare, no GST recovery on non- Canadian expenditures.) Post all Canadian expenditures to the appropriate line on the TR Req, and place a tick mark in the GST, PST, or TRV indicator box as required. Allocate each type of non-canadian travel expenditure to its respective line on the TR Req, and leave the GST, PST, and TRV indicator boxes blank on all these lines. (te that in a situation where two lines are required for one type of expenditure it is acceptable make a second line by crossing off the line description on a line that is not being used and use this line to record the second entry. The correct account code must be used for each line. If required, a schedule may be attached to the TR Req listing additional expenditure items as required.) Step 4. Is there airfare on this travel expense reimbursement? If yes, and travel is in Canada go to Step 5 If yes, and travel is in USA go to Step 6 If not, and travel is in Canada go to Step 7 If not, and travel is in USA go to Step 8 Step 5. Canadian Travel - Airfare Reimbursed on the TR Req (Actual GST recovery on airfare, estimated GST recovery on other expenditures.) Allocate each type of travel expenditure to its respective line on the TR Req Form. Place a tick in the GST indicator box next to the airfare expenditure, and place a tick mark in the GST, PST, or TRV indicator box as required for all other expenditures. Step 6. USA Travel Airfare Reimbursed on the TR Req (Actual GST recovery on airfare, estimated GST recovery on other Canadian expenditures, no recovery on US expenditures.)
Post airfare to the airfare line on the TR Req and place a tick mark in the GST indicator box. Post all other Canadian expenditures to the respective line on the TR Req, and place a tick mark in the GST, PST or TRV indicator box as required. Post each type of USA travel expenditure to the respective line on the TR Req, and leave the GST, PST, and TRV indicator boxes blank on these lines. (See note on step 3 above if more than one line is required for a particular expenditure type.) Step 7. Canadian Travel Airfare Reimbursed on the TR Req (Estimated GST recovery on all expenditures.) Allocate each type of travel expenditure to its respective line on the TR Req Form. Place a tick mark in the GST, PST or TRV indicator box as required. Step 8. USA Travel Airfare Reimbursed on the TR Req (Estimated GST recovery on Canadian expenditures only.) Post all Canadian expenditures to the respective line on the TR Req, and place a tick mark in the GST, PST or TRV indicator box as required. Allocate each type of USA travel expenditure to its respective line on the TR Req, and leave the GST, PST, and TRV indicator boxes blank on these lines. Step 9. General expenses Use Q Req Form (Actual GST recovery on Canadian expenditures.) Post expenditure by type to a separate line on the Q Req. Using the information on the Schedule II indicate the tax status of each expenditure line by placing a tick mark in the GST indicator box if the item is subject to GST only, for items that are subject to GST and PST place a tick mark in the GST and PST indicator box, and for items that are not subject to tax do not place a tick mark in either of the indicator boxes.
Schedule I tes and General Comments 1. The information in this document is taken primarily from the Excise Tax Act ( ETA ), and various administrative guides published by Canada Customs and Revenue Agency. This document is not meant to replace the ETA. The information provided is based on a general application of the rules and regulations of the ETA, as such, staff will likely encounter some expenditures that do not fit exactly into a particular step or recovery procedure. In these situations, staff will be required to seek additional assistance from finance or purchasing staff who are familiar with the specific rules in the ETA. te that if a reimbursement item is not addressed on this document, this type of expenditure will be added to this document at its next revision date. 2. In order to use this procedure document the TR Req Form must be modified by adding a third series of check boxes beside the GST and PST check boxes for each line item. The third column should be titled TRV. We understand that TRV is currently an option on the UBC data input screen, and when the TRV box is selected for a particular line the simplified formula (6/106) is used to calculate the GST recovery for that line. te that the TRV option may be selected on forms that do not have a TRV box by writing TRV over the GST and PST indicator boxes. 3. Canada Customs and Revenue Agency allows a simplified method to be used to estimate travel reimbursements. This formula is commonly referred to as the 6/106 formula. The 6/106 formula may only be used in situations where 90% or more of the amounts being reimbursed include GST, and the expenditures are of a similar nature. One advantages of using the 6/106 formula is that the person claiming the reimbursement does not have to separate taxable expenditures from non taxable expenditures (for example, a tip on a restaurant meal or a taxi fare does not have to be removed for the purpose of calculating the GST rebate or input tax credit). Another advantage of the 6/106 formula is that the person claiming the rebate does not have to be familiar with the various different provincial sales taxes that may or may not apply to the items being reimbursed. UBC currently does not have a standard policy regarding when the 6/106 formula must be used. Therefore, staff have the option of using the 6/106 formula to save time or calculate a detailed recovery if they wish to examine each expenditure to determine how much tax was charged. As explained below, when comparing the GST recovery using the 6/106 formula with the detailed method on a $30 restaurant meal, the difference in the amount recovered is 3 cents. Considering the amount of time that is saved by using the 6/106 formula we encourage staff to use the 6/106 formula for all travel expenditures other than airfare. Comparison of 6/106 formula to actual method: ($30.00 restaurant meal + $2.10 GST + $4.00 tip = $36.10) Actual method: $2.10 x 67% GST rebate = $1.40 rebate Simplified formula: ($36.10 x 6/106) x 67% GST rebate = $1.37 rebate
Schedule II - Summary of Sales Tax Status of Travel Expenditures Travel Expenses tes GST 1 AIRFARE Originate Canada Canadian Destination Taxable 7% 2 Originate Canada US Destination Taxable 7% 3 Originate Canada International Destination Zero-Rated - 4 YVR Airport Improvement Fee Taxable 7% 5 Visa and Travel papers Exempt - Car Rental Taxable 7% Per km allowance Taxable 7% 6 Bus & Public Transport Exempt - Ferry Transport Exempt - Taxis Taxable 7% Per Diem Taxable 7% 7 Meals (excluding gratuities) Taxable 7% Entertainment (excluding gratuities) Taxable 7% Accommodation (excluding gratuities) Taxable 7% 8 Conference Registration Taxable 7% Other parking Taxable 7% gestures of appreciation Taxable 7% 9 cell phone Taxable 7% telephone charges Taxable 7% laundry Taxable 7% tes: 1. Harmonized Sales Tax ( HST ) is 15% in New Brunswick, va Scotia, Newfoundland. 2. GST is clearly marked on airline tickets (next to XG code), or on travel agent invoices. HST is applicable on flights originating in HST Provinces, with a rth American destination. Flights to St. Pierre and Miquelon are deemed to be in Canada. 3. US does not include Hawaii. 4. Tickets purchased outside of Canada also have no GST. 5. $10 YVR Airport Improvement fee includes.65 cents GST ($10 x 7/107). 6. UBC policy is $0.33 per km includes GST (.33 x km x 7/107 = GST). 7. UBC per diem policy is $40 CAD per day includes $2.62 GST ($40 x 7/107). 8. Hotel accommodation is generally subject to provincial sales tax in BC, Sask., Manitoba, and Ontario. 9. Gestures of appreciation generally include GST.
Schedule III - Summary of Sales Tax Status on n-travel Expenditures n-travel Expense GST BC PST tes Consumer Products 7% 7% 1 Software 7% 7% Stationary 7% 7% Clerical services 7% N/A Restaurant Meals 7% Exempt Basic Groceries Zero-Rated Exempt 2 Entertainment 7% N/A 3 Car Rental 7% 7% Mileage (.33/km UBC policy) 7% N/A Bus & Public Transport Exempt N/A Ferry Transport Exempt N/A Taxis 7% Exempt Parking 7% 7% Conference Registration 7% N/A Uniform Allowance 7% N/A Books 7% Exempt 4 Cell phone 7% 7% Long distance charges 7% 7% Club dues 7% N/A tes: General The application of the Provincial Sales Tax in Saskatchewan, Manitoba, Ontario and Prince Edward Island is similar to the BC Social Services Tax ( PST ). 1. Computers, calculators, etc. 2. For GST purposes, basic groceries generally do not include confectionary and soda pop. 3. Concerts, hockey games, cinema, etc. 4. Printed and bound books for educational or literary purposes are exempt. Books that contain advertising are taxable.
SCHEDULE IV Flowchart of Procedural Steps for GST Calculation Step 1 Is this a travel reimbursement? Yes Step 2 Is the travel destination outside rth America? Yes Step 3 Post Canadian expenses to the respective line. Place a tick mark in either the GST, PST or TRV box Post other expenses to respective line with no tick mark Step 4 Is there airfare on the travel reimbursement? Yes Step 4 Is travel in Canada? Yes Step 5 Post expenditures to respective line on TR req Airfare Line - GST box All other lines - GST, PST or TRV box Step 6 Post Canadian expenditures to respective lines on TR req and place a tick mark in either the GST, PST or TRV box. Post Canadian expenditures to respective lines on TR req with no tick mark. Step 4 Travel in Canada Yes Step 7 Post expenditures to respective lines on TR req Place a tick mark in the GST, PST or TRV box Step 8 Post Canadian exp to respective line Place a tick mark in the GST, PST or TRV box. Post other expenses to appropriate line no tick mark Step 9 Use Q req post to separate line Items subjected to GST Place a tick mark in the GST box Items subjected to GST and PST Place a tick mark in the GST and PST box