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GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax with this increasing charged on most goods and services sold within Canada, regardless of where your business is available. Subject to certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales taxation's. 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. Tend to be some referred to as Input Tax Credits.

Does Your Business Need to Register?

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

Estimated sales for that business for 4 consecutive calendar quarters is expected to become less than $30,000. Revenue Canada views these businesses as small suppliers and perhaps they are therefore exempt.

The business activity is GST Registration Portal Login 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. organization with annual sales less than $30,000 is not must file for GST, in some cases it is beneficial to do so. Since a business is able to claim Input Tax credits (GST paid on expenses) if they are registered, many businesses, particularly in start off up phase where expenses exceed sales, may find that they are able to recover a significant amount of taxes. This has to be balanced against likely competitive advantage achieved from not charging the GST, and the additional administrative costs (hassle) from in order to file returns.