The Goods and Services Tax or GST is a consumption tax which charged on most goods and services sold within Canada, regardless of where your business is positioned. Subject to certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales property taxes. A business effectively acts as an agent for Revenue Canada by collecting the required taxes and remitting them on a periodic basis. Businesses are also permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. Tend to be some referred to as Input Tax Breaks.
Does Your Business Need to Sign up for?
Prior to getting yourself into any kind of business activity in Canada, all business owners need to figure out how the GST and relevant provincial taxes apply to these guys. 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 turn out to be less than $30,000. Revenue Canada views these businesses as small suppliers and are also 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 many others.
Although a small supplier, i.e. a business with annual sales less than $30,000 is not must file for GST, in some cases it is good do so. Since a business is able to claim Input Tax credits (GST paid on expenses) if may possibly registered, many businesses, particularly in start off up phase where expenses exceed sales, may find them to be able to recover a significant involving taxes. This have to be balanced against prospective competitive advantage achieved from not charging the GST, and the additional administrative costs (hassle) from needing to file returns.