The Canadian government recently announced a two-month Goods and Services Tax (GST) and Harmonized Sales Tax (HST) tax break on qualifying goods between December 14, 2024 and February 15, 2025. Businesses selling qualifying products in Canada are expected to remove these taxes for customers during the relief period.

Learn more about temporarily updating your tax settings in Retail POS below.

Does the tax relief period affect my business?

The GST/HST tax relief will affect businesses in Canada selling qualifying goods. If any of the products you sell qualify, you may be expected to comply by removing GST/HST on those items at the time of purchase during the relief period.

When does the tax relief period come into effect?

The tax relief period is currently set to begin on December 14, 2024 and end on February 15, 2025.

Can I update my tax settings in advance?

You won’t be able to update your tax settings in advance as you’ll need to continue collecting all applicable taxes before the relief period. However, it’s recommended to prepare your files in advance, so that you can apply any applicable changes before the tax relief period comes into effect and revert the changes after the tax relief period expires to avoid tax collection errors.

How do I adjust my tax settings in Retail POS to address the changes?

In Retail POS, you can set up the GST/HST exemption by creating a new sales tax and applying it to qualifying goods.

Preparing your backup files

1. Export your store items.
2. Open the spreadsheet in Google Sheets or Excel.
3. Delete the Qty. column to avoid making unintended inventory changes when updating or reverting your tax settings.

4. Save a copy of the spreadsheet, updating the name to clearly indicate it’s your original file.

   You can reimport this file to revert items to their original tax class when the relief period ends. Save both files where they can be easily found later.

5. Rename the other file to indicate it contains tax relief modifications.

Adding a new tax class

1. In Retail POS, navigate to Settings > Tax Classes.

   

2. Create a +New Tax Class called "GST exempt" (or similar).

   

3. Click Save Changes.

   

4. Navigate to Settings > Sales Taxes.

   

5. Click Sales Tax (or your default tax).
6. In the Class dropdown on the right, select the GST exempt tax class you previously created.

   

7. Set the Class GST Rate to 0% and the Class PST / HST Rate to your provincial sales tax rate.

   

8. Click + Add New Rate.
9. Click Save Changes at the top of the page.
10. Repeat the steps above per location, if needed.

Assigning qualifying items to the new tax class

1. Navigate to Settings > Tax Classes and copy the new tax class name exactly as written. 
2. Open the spreadsheet where you’ll be making the changes.
3. In your spreadsheet, paste the tax class name into the Tax Class column for any qualifying items.

   

4. Save your file and export as a CSV.
5. In Retail POS, navigate to Inventory > Import Items > + New Import.

   

6. Click Choose file or drag and drop the updated file to upload.
7. Under Select import method, select Update existing items only.

   

8. Click Review your import and resolve any errors.
9. Click Import items.

If only a few items in your store are impacted, you can manually assign them to the tax class.

Reverting items to the original tax class

When the tax break period ends, re-import your original file to revert to your previous tax setting. 

Make sure the Qty. column has been deleted so no unintended inventory changes are made when reverting your tax settings.

1. In Retail POS, navigate to Inventory > Import Items > + New Import.
2. Click Choose file or drag and drop the original file to upload.
3. Under Select import method, select Update existing items only.

   

4. Click Review your import and resolve any errors.
5. Click Import items.
6. To check that the change was applied:
   1. Navigate to Inventory > Item search.
   2. Click into the item and confirm its Tax class is correct (set to Item by default).

      

If only a few items in your store were impacted, you can manually reassign the original tax class.

What if I sell in other provinces/territories?

If you sell qualifying goods in other provinces or territories, you may need to set up sales taxes that include applicable PST per region. Follow the steps in the previous section to create regional versions as needed.

Can I remove tax at the register?

While it’s not recommended to remove tax during a sale due to potential cashier errors, it’s useful to know in case any inventory was missed or added but not updated during the GST/HST relief period.

To make tax adjustments during a sale:

1. Add products to the sale.
2. Click Set Tax.

   

3. Select a sales tax from the Tax dropdown.
4. Click Save Sales Tax.
5. Complete the sale.

Once you’ve removed tax from a sale you won’t be able to re-add it and will need to start over if the tax was removed in error.

Do I have to adjust my tax settings in eCom (C-Series)?

Merchants with eCom (C-Series) stores configured to use automatic taxes can apply the GST relief to qualifying items in your eCom store using tax overrides.

Customers may still see GST/HST in their carts until they enter their billing or shipping address at checkout, at which point the tax override will be applied.

1. In eCom (C-Series), create a tax override.

   

2. Create a new tax class, and then add qualifying products to it. If you have a large number of qualifying items, you can Create a group of products to include products filtered by category, supplier, or brand.

   

3. Enter a rate for each province that you want to apply the override to, optionally change the name, and update the tax type to Replace the federal tax (entirely replaces the federal tax rate). Ensure that PST is being collected if necessary.

Be sure to disable the override once the GST/HST relief period ends.

Do I have to adjust my tax settings in eCom (E-Series)?

If you have an eCom (E-Series) online store and previously set your tax rate to Automatic, you may need to update to Manual tax settings, destination zones, and tax rates for the GST/HST relief period.

You can prepare your import files in advance, bulk update your settings prior to the tax relief period coming into effect, and revert to your previous settings once the tax relief period expires.

To do before the beginning of the tax relief period

• Updating destination zones

  1. In your eCom Admin Panel, navigate to Settings > Taxes.
  2. On the Taxes page, in the Manual section, click Manage Tax Rates.

     

  3. Click Manage zones (global) to display the Destination Zones page.

     

  4. To set up standard tax zones:
     1. Click Add New Zone.

        

     2. Add the Zone Name specifying standard tax (or similar) in the name.

        

     3. Click Add State. Provinces/territories are referred to as "States" in eCom (E-Series).

        

     4. Check the boxes for the provinces you want to add, then click Add selected.

        

        Tip: Where applicable, you can set up zones based on similar total standard tax rates.

     5. At the top of the page, click Save.
     6. Repeat the steps to create zones for your area(s), as needed.
  5. To set up the GST/HST relief tax rates:
     1. On the Destination Zones page, click Add New Zone.
     2. Add the Zone Name, specifying GST/HST relief (or similar) in the name.

        

     3. Click Add State.

        

     4. Check the boxes for the provinces you want to add, then click Add Selected.

        Tip: The GST/HST relief rates should reflect the PST charged per province, where applicable.

     5. At the top of the page, click Save.
     6. Repeat the steps to create zones for your area(s), as needed.

• Setting up standard tax rates

  1. Navigate to Settings > Taxes.
  2. Under Manual, click Manage Tax Rates.

     

  3. To set up standard tax rates:
     1. Click Add New Tax.
     2. Enter a name in the Tax Name field, for example "Standard tax".

        

     3. Uncheck Enabled by default for all products.

        If you select Zone defines by: Billing address, make sure that option is enabled in your eCom settings by navigating to Settings > General > Cart & Checkout tab > toggle on Ask for a billing address during checkout.
        

     4. In the Rates per zone section, click the Zone dropdown and select the standard tax zone you set up earlier.

        

     5. Add the corresponding total standard tax rates in the Rate, % field:

        

     6. Click Add Rate to add other standard zones and rates as needed.
     7. When you're done, click Save.

  Setting up GST/HST relief tax rates

  1. Click Add New Tax.
  2. Enter a name in the Tax Name field, for example “GST/HST relief”.

     

  3. Uncheck Enabled by default for all products.
  4. In the Rates per zone section, click the Zone dropdown and select the GST/HST relief zone you set up earlier.

     

  5. Add the corresponding provincial tax rate(s) in the Rate, % field:

     

  6. Click Add Rate to add other GST/HST relief zones and rates as needed.
  7. When you're done, click Save.

• Getting your tax rate IDs

  These instructions are for Google Chrome browser. Steps to access the Inspect tool in other browsers will vary.

  1. In a Google Chrome window, navigate to Settings > Taxes > Manage Tax Rates.
  2. Double-click on the standard tax name in the grey column on the left, then right-click > Inspect.

     

  3. The standard tax name element will be highlighted in the Elements window.
     1. Two code lines up, locate the id="TaxId:### element.
     2. Double-click to highlight and press Cmd or Ctrl + C on your keyboard to copy it.

        

  4. Note down the standard TaxId.
  5. On the left side of the window in the grey column, right-click on the GST/HST relief tax name > Inspect.

     

  6. The GST/HST relief tax name element will be highlighted in the Elements window.
     1. Two code lines up, locate the id="TaxId:### element.
     2. Double-click to highlight and press Cmd or Ctrl + C on your keyboard to copy it.

        

  7. Note down the GST/HST relief TaxId.

  You can also get tax rate IDs by applying the taxes to product(s) after switching to Manual tax settings, exporting the product list, and copying the IDs in the product_enabled_manual_taxes column (available when Manual tax settings are enabled).

• Preparing your import and backup files

  1. Navigate to Catalog > Data Import & Export.
  2. Click Export Catalog to export your product list.

     

  3. Open the export file in Google Sheets or Excel and delete all the columns except for:
     • type
     • product_internal_id
     • product_sku
     • product_name (for reference)
     • product_tax_class_code

     

  4. Save a copy of your spreadsheet as a CSV file.
     1. Keep one file to use as a backup to revert changes. Update the file name to indicate it’s the original.
     2. Rename the duplicate file to indicate it contains GST/HST modifications. This will be your import file.
  5. In the GST/HST modifications spreadsheet, locate the product_tax_class_code column and rename it to product_enabled_manual_taxes.
  6. In the product_enabled_manual_taxes column, replace all automatic tax codes (like “default”) with:
     1. The standard TaxId you previously noted for unaffected products
     2. The GST/HST relief TaxId you previously noted for affected products

        

  7. Save and export your file as a CSV.

To do immediately before the beginning of the tax relief period

• Applying tax rates to products

  If you previously set your tax rate to Automatic, you’ll need to temporarily update your tax settings to Manual right before the relief period begins. You may choose to do this after your store has closed for the day on the day prior to avoid missing any tax collection beforehand.

  1. Navigate to Settings > Taxes and toggle off Automatic tax mode.

     

  2. Navigate to Catalog > Data Import & Export.
  3. Click Import File and select your GST/HST import file you prepared earlier.

     

  4. Click Start Import. A File imported success banner will pop up when complete.

     

  To make sure the changes were applied as expected, spot check your products:

  1. Navigate to Catalog > Products.
  2. Click into a few products.
  3. In the Taxes tab of unaffected products, you should see:
     • Standard tax toggled on
     • GST/HST relief toggled off

     

  4. In the Taxes tab of affected products, you should see:
     • Standard tax toggled off
     • GST/HST relief toggled on

     

To do immediately after the expiry of the tax relief period

• Reverting to the original sales tax

  You may choose to do this after your store has closed for the day to avoid missing any tax collection afterwards.

  Reverting to Automatic sales tax settings

  1. Navigate to Settings > Taxes.
  2. Toggle on Automatic tax mode.
     

     

  3. To make sure the changes were applied as expected, spot check your products:
     1. Navigate to Catalog > Products.
     2. Click into a few products. In the Taxes tab, all products should show the standard rate.

        

  Reverting to Manual sales tax settings

  When the tax break period ends, re-import your original file to revert to your previous product tax settings.

  1. Navigate to Catalog > Data Import & Export.
  2. Click Import File and select your original file you saved earlier.

     

  3. Click Start Import. A File imported success banner will pop up when complete.

  To make sure the changes were applied as expected, spot check your products:

  1. Navigate to Catalog > Products.
  2. Click into a few products. In the Taxes tab, your products should show your previous manual tax configurations with toggles enabled or disabled depending on your settings.

Please note that Lightspeed does not give tax advice. Any photos, images, graphics, written content, audio, video, files, materials, information, or any other data contained in this help document (the “Material”) are intended to be used solely for educational purposes, and Lightspeed makes no representations or warranties of any kind, express or implied, regarding the accuracy, completeness, or suitability of the Material for any particular purpose. Lightspeed shall not be liable for any errors or omissions in the Material or for any actions taken by you which are based on or informed by the Material. Review the Department of Finance Canada website for up-to-date GST/HST tax relief information and consult a tax professional for regional rules and regulations.