GST Considerations For New Business Owners

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

Does Your Business Need to Ledger?

Prior to joining any kind of business activity in Canada, all business owners need to figure out how the GST and relevant provincial taxes apply to these guys. Essentially, all businesses that sell goods and services in Canada, for profit, should charge GST, except in the following circumstances:

Estimated sales for your business for 4 consecutive calendar quarters is expected turn out to be less than $30,000. Revenue Canada views these businesses as small suppliers and consequently are 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 etc.

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