What are applicable taxes?

Question

1. GST/PST are applicable taxes? They are the taxes that Canadians must pay when buying something?

2. When are taxes not applicable? I see them on coupons and gift certificates.

Answer 1

To my knowledge there is no tax(es) specifically called "applicable taxes." Applicable taxes just refers to whatever taxes apply to a given transaction. GST & PST (or HST depending on the province) apply to most products sold. A notable exemption to GST would be groceries.

Taxes wouldn't apply to a gift certificate because you aren't buying anything per say, you are just transferring cash on to a gift card like you might transfer money into your bank account.

Regarding coupons this is because the item is taxed on the price before the value of the coupon is subtracted. The reason being the coupon is accepted as a form of payment in lieu of cash but it is not reducing the price of the item, just the balance owing.

I have included a link to Canada Revenue Agency regarding GST and what is taxable or exempt in hopes to better answer your question.