GST Quick Method - Gifi code for income?

Tax Topics
1

Hi All,
In preparing a T2 for a corporation using the quick method of accounting for GST/HST, what is the appropriate GIFI code for the GST income (the difference between the amount remitted and amount collected)? It’s not really “other revenue” is it? Technically it should be an offset against expenses which are inflated by the 13% (Ontario) but I don’t think I should be putting a negative expense.

Thanks!

2

@Versa
I normally I use GIFI 8230

8230 Other revenue
gains on settlement of a debt and miscellaneous revenue

I have seen some use
9975 Extraordinary items
This item includes gains/losses resulting from events that:

  • are not expected to occur regularly over a period of years
  • do not typify normal business activities
  • do not depend primarily on decisions or determinations by management

Examples include the expropriation of a corporation’s or partnership’s land and buildings for a highway, the destruction of a large portion of a wheat crop by a tornado, and an explosion in a nuclear reactor resulting in high-level radioactive emission.

GIFI

3

I always use 8230 Other revenue.

4

Thank for your replies @dominique_dabolczi and @Rein. As long as classifying it as a type of revenue doesn’t cause problems with the GST department when they are comparing the GST return to the T2.

5

My understanding is that CRA considers the the difference between the amount of GST/HST collected and the amount remitted using the Quick Method to be “government assistance”, the GIFI code for which is:

*8242
Subsidies and grants
government assistance and subsidy payments (for non-fishing corporations), federal, provincial, territorial, or municipal grants received

  • Corporations, including non-profit organizations, and partnerships can use this item to report federal, provincial, territorial, or municipal grants received.

If COVID-19 related assistance is received, include it under item 8242

1 Like
6

@keith1
I appreciated your tip of using 8242, subsidies and grants.

CRA sources of income

CRA sources of income - grants

7

Thanks @keith1. This makes more sense.

If you take the quick method for what it is… to save time on accounting, then that difference we are calling income or grants is overstated by the ITCs that would have been taken with the regular method and the expenses are also overstated. I know that some accountants/bookkeepers continue to book the GST/HST on each expenditure separately with the quick method and in that case the difference would be a true grant. But that doesn’t save any time on accounting, does it?

I don’t have a lot of clients on the quick method. It seems to work best for those that don’t qualify for many ITCs anyway.

Thanks all for your contributions.