The products and Services Tax or GST can be a consumption tax which is charged on many services and goods sold within Canada, no matter where your company is located. At the mercy of certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales taxes. A company effectively represents an agent for Revenue Canada by collecting the required taxes and remitting them with a periodic basis. Organizations are also permitted to claim the required taxes paid on expenses incurred that relate on their business activities. These are termed as Input Tax Credits.
Does Your small business Must Register? Before starting any kind of commercial activity in Canada, all business people have to see how the GST and relevant provincial taxes apply to them. Essentially, all companies that sell goods and services in Canada, to make money, are needed to charge GST, with the exception of these circumstances:
Estimated sales for your business for 4 consecutive calendar quarters is expected to get lower than $30,000. Revenue Canada views these lenders as small suppliers and they are therefore exempt.
The organization activity is GST exempt. Exempt goods and services includes residential land and property, daycare services, most health and medical services etc.
Although a smaller supplier, i.e. a small business with annual sales lower than $30,000 is not needed to produce GST, occasionally it really is beneficial to do this. Since a business are only able to claim Input Tax Credits (GST paid on expenses) should they be registered, many organisations, mainly in the start-up phase where expenses exceed sales, might find they are capable to recover a significant amount of taxes. How’s that for balanced up against the potential competitive advantage achieved from not charging the GST, as well as the additional administrative costs (hassle) from needing to file returns.
Check out about Gst you can check this webpage.