GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax which isn’t charged on most goods and services sold within Canada, regardless of where your business is available. Subject to certain exceptions, all companies are required to charge GST, currently at 5%, plus applicable provincial sales taxes. A business effectively acts as an agent for Revenue Canada by collecting the required taxes and remitting them on a periodic basis. Businesses will also permitted to claim the taxes paid on expenses incurred that relate of their business activities. Tend to be some referred to as Input Tax Credits.

Does Your Business Need to Register?

Prior to joining any kind of business activity in Canada, all business owners need to determine how the GST Registration Portal Login and relevant provincial taxes apply to the group. Essentially, all businesses that sell goods and services in Canada, for profit, have to charge GST, except in the following circumstances:

Estimated sales for that business for 4 consecutive calendar quarters is expected to be able to less than $30,000. Revenue Canada views these businesses as small suppliers usually therefore exempt.

The business activity is GST exempt. Exempt goods and services includes residential land and property, child care services, most health and medical services many others.

Although a small supplier, i.e. a booming enterprise with annual sales less than $30,000 is not expected to file for GST, in some cases it is good do so. Since a business can merely claim Input Breaks (GST paid on expenses) if they are registered, many businesses, particularly in the start up phase where expenses exceed sales, may find that possibly they are able to recover a significant amount taxes. This is balanced against likely competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from to be able to file returns.

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