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 businesses 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 will also permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. These people are referred to as Input Tax Snack bars.
Does Your Business Need to Ledger?
Prior to joining any kind of commercial activity in Canada, all business owners need to figure out how the GST and relevant provincial taxes apply to that company. Essentially, all businesses that sell goods and services in Canada, for profit, are required to charge GST, except in the following circumstances:
Estimated sales for your business for 4 consecutive calendar quarters is expected to become 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 Services Tax Registration in India Online and services includes residential land and property, child care services, most health and medical services and a lot more.
Although a small supplier, i.e. organization 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 is able to claim Input Tax credits (GST paid on expenses) if tend to be registered, many businesses, particularly in start off up phase where expenses exceed sales, may find that they are able to recover a significant quantity taxes. This has to be balanced against likely competitive advantage achieved from not charging the GST, plus the additional administrative costs (hassle) from having to file returns.