GST Considerations For New Business Owners
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 can be found at. Subject to certain exceptions, all companies are required to charge GST, currently at 5%, plus applicable provincial sales taxes. A business effectively acts as an agent for Revenue Canada by collecting the required taxes and remitting them on a periodic basis. Businesses likewise permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. The particular referred to as Input Tax Credits.
Does Your Business Need to Sign up for?
Prior to participating in any kind of commercial activity in Canada, all business owners need to see how the GST and relevant provincial taxes apply to the group. 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 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 Application Online in India exempt. Exempt goods and services includes residential land and property, child care services, most health and medical services and many others.
Although a small supplier, i.e. a booming enterprise with annual sales less than $30,000 is not required to file for GST, in some cases it is beneficial to do so. Since a business can merely claim Input Tax credits (GST paid on expenses) if considerable registered, many businesses, particularly in start off up phase where expenses exceed sales, may find that they are able to recover a significant amount taxes. This ought to balanced against the potential competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from needing to file returns.
