Taxable supply (GST/HST)

Anyone reading a seller’s GST/HST returns, or working out which parts of a sale carry the tax, meets this term. The Act defines a taxable supply as a supply made in the course of a commercial activity. Its definition of commercial activity covers a business or an adventure or concern in the nature of trade of the person, and the person’s supply of real property other than an exempt supply, with exceptions, including to the extent the business involves making exempt supplies.

What the CRA says

The CRA says most property and services supplied in or imported into Canada are subject to GST/HST, and that a registrant generally has to charge and collect it on taxable supplies other than zero-rated ones. It lists sales or rentals of commercial real property, franchises, and legal and accounting services among its examples. For the other two categories, see zero-rated vs exempt supplies.

In a business sale

• Which assets in the deal are taxable supplies, and which are not
• Whether the seller is a registrant and whether the buyer will be
• Whether the parties are making the section 167 election, under which no tax is payable on the supplies under the agreement except those the Act lists, such as a taxable sale of real property to a non-registrant
• How the price is allocated across assets, since on a sale of a business that meets section 167’s conditions the Act deems a separate supply of each property for the part of the price reasonably attributable to it

See do I pay GST/HST when I buy a small business in Canada.