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 located. 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 likewise permitted to claim the taxes paid on expenses incurred that relate back to their business activities. The particular referred to as Input Tax Breaks.

Does Your Business Need to Ledger?

Prior to getting yourself into any kind of commercial 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, have to charge GST, except in the following circumstances:

Estimated sales for that business for 4 consecutive calendar quarters is expected to be able to 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 Service Tax Registration in India Online 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 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 tend to be registered, many businesses, particularly in the start up phase where expenses exceed sales, may find oftentimes able to recover a significant involving taxes. This have to be balanced against prospective competitive advantage achieved from not charging the GST, plus the additional administrative costs (hassle) from to be able to file returns.