Why do you charge HST on repaying negative tab balance?

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  • Updated 4 years ago
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What "product" am I buying when I clear my tab, which is a loan?.

Since when do people pay HST on debts?
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Akarsh Mallya

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Posted 4 years ago

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Dennis, Mobile Master

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Tax is charged when you purchase an item. When you choose to pay off the tab early (this could be within your first month when you got the new phone or 12 months later) you are technically paying for the phone. Hence it is taxable.

Ex. If you buy the phone 100% you pay sales tax on that amount.
If you buy the phone on tab then decide to pay off the tab right away you are still paying for the phone and you have to pay sales tax on that.

The government always gets there. This is for all carriers in Canada. No way around it unless you sit out the full term of the tab. And to be honest I'm surprised the government doesn't take the tax from the full amount of the tab when you first get the phone.

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