Everything You Need to Know About the GST Holiday as a Restaurant Owner-Operator In Alberta
The Canadian federal government has announced a temporary Goods and Services Tax (GST) holiday aimed at providing financial relief to consumers and stimulating the hospitality sector. As an owner-operator in Alberta, it’s crucial to understand how this initiative impacts your business operations.
Key Details of the GST Holiday:
Duration: The GST holiday is effective from December 14, 2024, to February 15, 2025.
Applicable Items: The tax relief applies to a range of holiday essentials, including:
Groceries
Restaurant meals and beverages
Children’s clothing and footwear
Children’s diapers and car seats
Children’s toys
Physical books and printed newspapers
Christmas and similar decorative trees
Operational Adjustments: During this period, businesses must adjust their point-of-sale systems to ensure GST is not charged on qualifying items.
Qualifying Items Relevant to Restaurant Owners:
Food: All food items served in restaurants, including dine-in, takeout, and delivery, are eligible for the GST exemption.
Non-Alcoholic Beverages: Non-alcoholic drinks, such as coffee, tea, carbonated drinks, juices, and smoothies
Alcoholic Beverages: Beer and malt beverages, for example, canned or bottled beer and pitchers of beer. Wine, cider and sake (including fortified) that are 22.9% alcohol by volume (ABV) or less. Spirit coolers and premixed alcoholic beverages that are 7% ABV or less. This applies to beverages, both local and non-local.
Items That Do Not Qualify Relevant to Restaurant Owners:
Alcoholic spirits and liqueurs: Alcoholic beverages (other than beer, malt beverages, wine, cider, and sake) with more than 7% ABV. All beer, malt beverages, wine, cider, and sake fortified in excess of 22.9% absolute ethyl ABV, do not qualify for GST/HST relief.
Catering Services: While catered meals, including the preparation and serving of qualifying food and beverages, are GST-exempt, additional services like venue rental and other labor charges are not exempt and will still incur GST.
Gift Cards: Purchases made with gift cards during the GST holiday will benefit from the tax exemption. However, buying gift cards during this period does not provide a GST exemption for future purchases made after the holiday ends.
The above list was pulled from the Government of Canada Website as of December 10, 2024. Please refer to the Government of Canada’s website for official guidelines, as they will be the most up-to-date.
Recommendations for Owner-Operators:
System Updates: Coordinate with your point-of-sale and accounting software to ensure GST is not applied to qualifying items during the specified period.
Menu Updates: If your menu prices include GST, you may need to adjust them to reflect the tax exemption or communicate that the GST has been temporarily removed.
Receipts: Ensure that receipts for qualifying items clearly show no GST charged during the holiday period.
Staff Training: Educate your staff about the GST holiday, including which items are exempt and how to process transactions correctly.
Customer Communication: Inform your customers about the GST holiday and how it benefits them; mentioning it at the table when they are ordering could impact how much they order.
Monitor Compliance: Regularly review transactions to ensure compliance with the GST holiday provisions and maintain accurate records for reporting purposes.
Maintain Accurate Records: Maintain clear and accurate records of all transactions during the GST holiday for tax reporting and audit purposes.
Tax Filing: Understand how to report sales during the GST holiday. Consult your accountant or bookkeeper for guidance on handling exempt sales in your tax filings.