Taxes: Recoverable vs. Non-Recoverable

What is recoverable tax?

What is non-recoverable tax?

What is recoverable tax?

A tax is recoverable if you can deduct the tax you paid to other businesses from the tax you collect from your customers.

If you buy something for your business, you pay tax on your purchase. You can deduct this tax from the tax you collect from your customers.

For example, if you pay $1 in tax on a purchase for your business, and collect $5 in tax from your own sales, you would owe the government $4.

What is non-recoverable tax?

A tax is non-recoverable if you must remit the full amount you've collected from customers, regardless of what you may have paid.

If you buy something for your business, you pay tax on your purchase. This tax cannot be deducted from the tax you collect from your customers.

For example, if you pay $1 in tax on a purchase for your business, and collect $5 in tax from your own sales, you would owe the government the full $5.

Once you create a tax, you cannot change the recoverable or non-recoverable option. Learn how to Add, edit or delete a sales tax.