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 situated. Subject to certain exceptions, all companies are required to charge GST, currently at 5%, plus applicable provincial sales tax return. 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 Snack bars.
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 figure out how the GST and relevant provincial taxes apply to both of them. Essentially, all businesses that sell goods and services in Canada, for profit, should charge GST, except in the following circumstances:
Estimated sales for the 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 perhaps they are therefore exempt.
The business activity is GST exempt. Exempt Goods and Service Tax Application in India Online and services includes residential land and property, child care services, most health and medical services numerous 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 beneficial to do so. Since a business can only claim Input Tax credits (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 amount of taxes. This have to be balanced against chance competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from needing to file returns.
