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 positioned. Subject to certain exceptions, all companies 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 likewise permitted to claim the taxes paid on expenses incurred that relate back to their business activities. These are referred to as Input Tax Breaks.

Does Your Business Need to Sign up for?

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

Estimated sales for that business for 4 consecutive calendar quarters is expected turn out to be 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 etc.

Although a small supplier, i.e. an individual with annual sales less than $30,000 is not required to file for GST, in some cases it is good do so. Since a business can merely claim Input Tax credits (GST 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 amount of taxes. This has to be balanced against prospective competitive advantage achieved from not charging the www GST Gov in Login Online India, and the additional administrative costs (hassle) from having to file returns.