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GST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax much more charged on most Goods and Services Tax Website and services sold within Canada, regardless of where your business is positioned. Subject to certain exceptions, all businesses are required to charge GST, currently at 5%, plus applicable provincial sales property taxes. A business effectively acts as an agent for Revenue Canada by collecting the required taxes and remitting them on a periodic basis. Businesses are also permitted to claim the taxes paid on expenses incurred that relate thus to their business activities. These people are referred to as Input Tax Snack bars.

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Prior to participating in any kind of economic activity in Canada, all business owners need to figure out how the GST and relevant provincial taxes apply to both of them. Essentially, all businesses that sell goods and services in Canada, for profit, should 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 consequently 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 many others.

Although a small supplier, i.e. organization with annual sales less than $30,000 is not must file for GST, in some cases it is good do so. Since a business can only claim Input Tax credits (GST paid on expenses) if these kinds of are registered, many businesses, particularly in the start up phase where expenses exceed sales, may find that they are able to recover a significant involving taxes. This have to be balanced against chance competitive advantage achieved from not charging the GST, provided additional administrative costs (hassle) from to be able to file returns.