GST/HST

Registering for GST/HST

To register or not to register, that is the question. Are you starting a business? Did you know that it’s not mandatory to register for the GST/HST right away? What does this all mean?

In a nutshell, if you register for GST/HST, it means you’ll be adding this tax to your customer’s bills in the amount applicable to your province, and remitting that amount to the government. You will also be able to deduct the amount of GST/HST that you have paid on goods or services as an input tax credit on your return.

Let’s look at the rules surrounding registering.

• If you provide taxable supplies in Canada, but are a small supplier, then you do not need to register for GST/HST. A small supplier must meet one of the following conditions:

• you are a sole proprietor and your total revenues from taxable supplies (before expenses) from all your businesses are $30,000 or less over the last four consecutive calendar quarters combined or in any calendar quarter

• you are a partnership or a corporation and your total revenues from taxable supplies (before expenses) are$30,000 or less (or $50,000 or less if you are a public service body) over the last four consecutive calendar quarters combined or in any calendar quarter

Registration is not mandatory under the following circumstance:

• selling goods or services classified as GST zero-rated or exempt. If you are selling goods or services that are zero-rated (such as exports, medical devices or basic groceries) or goods or services that are exempt (such as music lessons or child care), you don’t have to charge GST/HST.

• you are a non-resident who does not carry on business in Canada

• your only commercial activity is the sale of real property, other than in the course of a business. Note that there are exceptions to the exceptions, too. For instance, taxi and limousine operators and non-resident performers have to charge GST/HST even if they are small suppliers.

If your business does qualify as a GST/HST small supplier, you may want to register for the GST/HST anyway. If you register for the GST/HST, you can then reclaim the GST/HST you’ve paid on business purchases, including big things like capital property and small items like office supplies. Most businesses when starting up will spend more money than they earn in the first few months of operation, therefore, it may be in your best interest to register for the GST when you’re starting a business because it could end up putting many extra dollars in your pocket.

Different people running various businesses will have contrasting ideas about registering for GST/HST or not. A qualified bookkeeper can help make those decisions with you, to do what’s best for your particular needs.

Registering for GST/HST

To register or not to register, that is the question. Are you starting a business? Did you know that it’s not mandatory to register for the GST/HST right away? What does this all mean?

In a nutshell, if you register for GST/HST, it means you’ll be adding this tax to your customer’s bills in the amount applicable to your province, and remitting that amount to the government. You will also be able to deduct the amount of GST/HST that you have paid on goods or services as an input tax credit on your return.

Let’s look at the rules surrounding registering.

If you provide taxable supplies in Canada, but are a small supplier, then you do not need to register for GST/HST. A small supplier must meet one of the following conditions:

• you are a sole proprietor and your total revenues from taxable supplies (before expenses) from all your businesses are $30,000 or less over the last four consecutive calendar quarters combined or in any calendar quarter

• you are a partnership or a corporation and your total revenues from taxable supplies (before expenses) are$30,000 or less (or $50,000 or less if you are a public service body) over the last four consecutive calendar quarters combined or in any calendar quarter

Registration is not mandatory under the following circumstance:

• selling goods or services classified as GST zero-rated or exempt. If you are selling goods or services that are zero-rated (such as exports, medical devices or basic groceries) or goods or services that are exempt (such as music lessons or child care), you don’t have to charge GST/HST.

• you are a non-resident who does not carry on business in Canada

• your only commercial activity is the sale of real property, other than in the course of a business. Note that there are exceptions to the exceptions, too. For instance, taxi and limousine operators and non-resident performers have to charge GST/HST even if they are small suppliers.

If your business does qualify as a GST/HST small supplier, you may want to register for the GST/HST anyway. If you register for the GST/HST, you can then reclaim the GST/HST you’ve paid on business purchases, including big things like capital property and small items like office supplies. Most businesses when starting up will spend more money than they earn in the first few months of operation, therefore, it may be in your best interest to register for the GST when you’re starting a business because it could end up putting many extra dollars in your pocket.

Different people running various businesses will have contrasting ideas about registering for GST/HST or not. A qualified bookkeeper can help make those decisions with you, to do what’s best for your particular needs.