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GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax that is charged on most goods and services sold within Canada, regardless of where your business is positioned. Subject to certain exceptions, all companies are required to charge GST, currently at 5%, plus applicable provincial sales taxation's. 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 to their business activities. The particular referred to as Input Tax Breaks.

Does Your Business Need to Ledger?

Prior to going into any kind of economic activity in Canada, all business owners need to see how the GST and relevant provincial taxes apply to these guys. Essentially, all businesses that sell Goods and Service Tax Application in India Online and services in Canada, for profit, have to charge GST, except in the following circumstances:

Estimated sales for the business for 4 consecutive calendar quarters is expected to be less than $30,000. Revenue Canada views these businesses as small suppliers and perhaps they are therefore exempt.

The business activity is GST exempt. Exempt goods and services includes residential land and property, child care services, most health and medical services numerous others.

Although a small supplier, i.e. a business with annual sales less than $30,000 is not had to have to file for GST, in some cases it is beneficial to do so. Since a business can merely claim Input Breaks (GST paid on expenses) if they are registered, many businesses, particularly in start off up phase where expenses exceed sales, may find them to be able to recover a significant amount of taxes. This has to be balanced against likely competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from having to file returns.