No doubt, GST/HST once again. We are back to the basics.
GST/HST is part of sales tax compliance programs that are monitored by the CRA. The basic question that many businesses would ask at the beginning when they start the businesses.
When it is the time to register for a GST/HST account?
A wonderful question.
But first, let’s find out who should register for a GST/HST account?
GST/HST registrants are not limited to local corporations. Individuals even non-residents as well as foreign companies, as long as they provide taxable goods and services to customers in Canada will be required to register for the Goods and Services Tax / Harmonized Sales Tax (GST/HST).
Is there a must? Yes.
According to the CRA, You must register for a GST/HST account if both situations apply:
- make taxable sales, leases, or other supplies in Canada
- not a small supplier
First condition is easier to understand. What’s the concept of a small supplier?
A small supplier generally does not generate over $30,000 taxable supplies in four consecutive calendar quarters. If it fits in your situation, then you are a small supplier and you do not have to register.However, at the end of every quarter, you have to asses the situation to see if you are still the same status. Once the status has been changed, you have to start charging the GST/HST on the supply that made you exceed $30,000. And you need to register within 29 days from the day you cease to be a small supplier. Your effective date of registration is usually the day you stop being a small supplier. It can also be an earlier date. Since it is unrealistic to keep track of sales/revenue figures every quarter, it is suggested for business voluntarily register a GST/HST account to avoid a hassle.
For some cases, even you are a small supplier, but you are a self-employed taxi driver or commercial ride-sharing driver, you must register for a GST/HST account. The effective date of registration is the day when you start supplying taxable passenger transportation services.
We mentioned about non-residents at the beginning. If non-residents provide taxable supplies (including zero-rated supplies) in Canada in the course of carrying on business activity in Canada, there is no such a concept like a small supplier, you have to register with the CRA.
In addition, some rental businesses are subject to GST/HST as well. It is worth noting that careful review GST on your business is a good strategy to keep auditors away from you.
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