It is almost the end of another tax year and as we wrap our presents in time for the holidays, we should also think about wrapping up our finances for the upcoming tax season. For small business owners, the requirements of the Canadian government can seem overwhelming when first starting your business. There is so much to know around accounting and tax. While working with a professional is always a great investment of your money, there are also some helpful resources that can give you an overview of the sales tax situation. Take a look at our small list below, and then stay tuned as we get the scoop on tax season from an accountant.
Understanding Sales Tax in Canada
There are some common misconceptions about sales tax in Canada;
– You need to register your business to collect GST/HST if your business will generate more $30,000 in a calendar year;
– You need to charge the sales tax for the province your customer resides in (if you live in Calgary, but your client is in Ontario you charge them HST, the sales tax and rate in Ontario).
And for some more reading all about the what, how and why, here are some resources:
We like this one from the Canadian government, which explains what GST/HST is and who should be charging it.
And here is a link to the resources you need to register to collect sales tax, charge, collect and remit sales tax.
If you are in Ontario, or have clients/customers in Ontario, here is a great primer on HST: 5 Things Every Small Business Owner Should Know About HST.
And to help you answer the question “Should I charge GST?” here is a helpful article.