Quote:
Originally Posted by JulieDriving
I'm a little confused about the 5% tax vs. 13-15% tax stuff.
Here's how I understand it:
- Regardless where I live, I have to pay the federal and provincial tax.
- If I buy new in Canada, I have to pay those taxes.
- If I import, I have to pay those same taxes. However, I also have to pay an additional 6.1% import duty.
- So, even though Albertans are lucky because they pass less tax, it shouldn't mean they have an advantage over Ontarians or other Canadians due to importing, right? They would have paid less tax if they bought it in Canada too.
So, the effective difference between a Canadian and a US purchase is the 6.1% import duty. Am I wrong?  |
You understand everything fairly well.
1. If you import a car from the US, you will be responsible for duties of 6.1% on foreign vehicles (anything not made in US or Canada), plus GST and PST (or HST). Alberta does not have PST, so you would only pay GST. Albertans are lucky in general, they don't have any PST whatsoever (see
http://en.wikipedia.org/wiki/Sales_taxes_in_Canada).
Don't worry about this 5% vs. 13-15%. Just think about the effective taxes. As a resident of Ontario, you will effectively pay 19.1% in duties and taxes which is broken down into 6.1% duties + 13% HST (before this would have been 5% GST + 8% PST).
GMW is paying 15% HST because he lives in Nova Scotia, where they have 15% HST (i.e. 5% GST + 10% PST)
2. If you buy a new car in Canada, you will pay taxes based on the province you reside in (so HST - 13% in Ontario). There are no duties payable on new vehicles purchased in Canada, as they are already built into the price of the car.
3. If you live in Ontario, you will pay HST on any car you purchase, used, new or imported. Remember, HST is applicable on the sale price (or listed value, whichever is higher) of the car. Just remember, the higher the price of the car, the more HST you will pay.