Frequently Asked Questions About GST/HST By Business Owners

Frequently Asked Questions About GST/HST By Business Owners

For those of you who are starting a new business, it is essential to know your tax obligations.  Every business owner must report their net profits on a either their personal tax return if they are unincorporated or a corporation tax return if they are incorporated.

In addition to income tax, it is essential to consider whether or not you should register and collect GST/HST and provincial sales taxes.  There are a variety of questions around this topic:

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Should you register for GST/HST and QST and What it Means to Be Zero Rated
Self Employed, Business Tax Ronika Khanna Self Employed, Business Tax Ronika Khanna

Should you register for GST/HST and QST and What it Means to Be Zero Rated

When starting your new Canadian small business or launching into self employment, it is essential to determine whether you are required to register for GST/HST (and QST if you have a started a business in Quebec). The simple answer is that if you anticipate that your annual gross revenues (total sales) are going to exceed $30,000 and your products or services do not qualify as Exempt or Zero rated (explained below) , then you are required to register for GST/HST and collect sales taxes from your Canadian customers and clients. The $30,000 limit applies to the last 4 quarters of revenues. If you decide not to register for sales tax upon the inception of your business/self employment, then you must monitor your sales revenues over a rolling 4 quarter period and register once you are close.

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5 Reasons to Change Your GST/HST/QST Reporting Period and How to Do It
Business Tax Ronika Khanna Business Tax Ronika Khanna

5 Reasons to Change Your GST/HST/QST Reporting Period and How to Do It

When starting a business the selection of the GST/HST or QST reporting period i.e. how often to file your sales tax returns is often based on new business considerations. Many new business owners are quite enthusiastic and/or orderly and therefore would prefer to file their reports and pay the balance owing on a more regular basis. Conversely owners might be concentrating on the other aspects of running their business and do not want to be bothered with the administrative hassle of regular monthly or quarterly reporting. In this case, you might select the annual reporting option to make the year end reporting requirements as simple as possible. As time passes and your business evolves, you might realize that the option that you initially selected may no longer be the most optimal.

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Revenue Canada Interest, Penalties and Payment Arrangements for Income Tax and GST/HST Returns

Revenue Canada Interest, Penalties and Payment Arrangements for Income Tax and GST/HST Returns

Whether you are an individual or a business in Canada, taxes are an inescapable part of your existence.  All sources of income need to be calculated, tax returns needs to be filed and taxes owing must be paid.  This is somewhat facilitated if you are an employee as your employer tends to take care of the majority of remittances.  Self-employed individuals, sole proprietorships, partnerships and corporations on the other hand, must account for their income and expenses , determine taxes payable  and remit the appropriate amounts.  Additionally, businesses are also responsible for other filings including GST/HST and QST and payroll.  A lack of knowledge, imperfect accounting systems and the business of running a business sometimes interfere with the timeliness of filings.  The Canada Revenue Agency attempts to curb these tardy behaviours by imposing penalties and interest on late filings as follows:

Unincorporat

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