1. What is TPS?

The TPS (Taxe sur les Produits et Services) is a Canadian value-added tax of 5% applied to most goods and services sold in Canada. It is one component of the HST (Harmonized Sales Tax) in participating provinces.

2. How Does the Calculator Work?

The calculator uses the simple TPS formula:

Where:

• \( Price \) — The base price before taxes (in CAD)
• \( 0.05 \) — The TPS rate (5%)

Explanation: The calculation multiplies the base price by 5% to determine the TPS amount.

3. Importance of TPS Calculation

Details: Accurate TPS calculation is important for businesses to properly charge and remit taxes, and for consumers to understand the tax component of their purchases.

4. Using the Calculator

Tips: Enter the base price in Canadian dollars (without any taxes). The price must be a positive number.

5. Frequently Asked Questions (FAQ)

Q1: Is TPS the same as GST?
A: Yes, TPS is the French name for GST (Goods and Services Tax). They refer to the same 5% federal tax.

Q2: What items are exempt from TPS?
A: Basic groceries, prescription drugs, medical devices, and certain other items are exempt from TPS.

Q3: Do all provinces charge TPS?
A: All provinces charge TPS/GST, but in some provinces it's combined with PST into HST.

Q4: How often must businesses remit TPS?
A: It depends on the business's revenue, ranging from monthly to annually.

Q5: Can businesses claim TPS credits?
A: Yes, registered businesses can claim Input Tax Credits for TPS paid on business expenses.