GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax that is charged on most goods and services sold within Canada, regardless of where your business is situated. Subject to certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales income taxes. A business effectively acts as an agent for Revenue Canada by collecting the taxes and remitting them on a periodic basis. Businesses are also permitted to claim the taxes paid on expenses incurred that relate inside their business activities. The particular referred to as Input Tax Credit cards.

Does Your Business Need to Sign up for?

Prior to participating in any kind of commercial activity in Canada, all business owners need to determine how the GST and relevant provincial taxes apply to that company. Essentially, all businesses that sell goods and services in Canada, for profit, should always charge GST, except in the following circumstances:

Estimated sales for the business for 4 consecutive calendar quarters is expected to become less than $30,000. Revenue Canada views these businesses as small suppliers and are also 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 and many others.

Although a small supplier, i.e. organization with annual sales less than $30,000 is not had to have to file for GST, in some cases it is beneficial to do so. Since a business could only claim Input Breaks (GST Portal Login Online India paid on expenses) if considerable registered, many businesses, particularly in the start up phase where expenses exceed sales, may find that they will be able to recover a significant quantity taxes. This really balanced against chance competitive advantage achieved from not charging the GST, and the additional administrative costs (hassle) from having to file returns.