1. What is TPS?

TPS (Taxe sur les Produits et Services) is the Canadian federal goods and services tax (GST). It's a value-added tax applied to most goods and services sold in Canada.

2. How Does the Calculator Work?

The calculator uses the TPS equation:

Where:

• \( Price \) — The base price before tax (CAD)
• \( Rate \) — The TPS rate (unitless, typically 0.05 for 5%)

Explanation: The equation simply multiplies the price by the tax rate to calculate the tax amount.

3. Importance of TPS Calculation

Details: Accurate TPS calculation is crucial for proper pricing, accounting, and compliance with Canadian tax laws.

4. Using the Calculator

Tips: Enter price in Canadian dollars and the TPS rate (e.g., 0.05 for 5%). All values must be valid (price > 0, rate between 0-1).

5. Frequently Asked Questions (FAQ)

Q1: What is the current TPS rate in Canada?
A: As of 2023, the federal TPS rate is 5% (0.05).

Q2: Is TPS the same as TVQ?
A: No, TPS is the federal tax while TVQ is the provincial tax in Quebec. Some provinces have HST which combines both.

Q3: Are all products subject to TPS?
A: Most goods and services are taxable, but there are exceptions like basic groceries, prescription drugs, and medical devices.

Q4: How is TPS different from sales tax?
A: TPS is a value-added tax applied at each stage of production, while sales tax is only applied at the final sale to the consumer.

Q5: Can businesses recover TPS they pay?
A: Yes, registered businesses can claim Input Tax Credits to recover TPS paid on business purchases.