It Depends On The Following Three Main Factors:

  • Nature of supplies
  • Status of supplier
  • Nature and level of purchase you made

Nature Of Supplies

Tax Accountant Toronto team state that if you only make GST/HST exempt goods or services, you do not need to register for it. Educational services, medical or dental treatments, and food and beverages are all examples of GST/HST exempt supplies.

Status Of Supplier

If you meet the requirements for a small supplier and are not one of the exceptions, you don’t need to register for GST/HST.

Criteria For Small Supplier

If the total taxable supplies of all your companies in the last four consecutive calendar quarters and any single quarter are equal to or less than $30,000, you’re exempt.

All of your worldwide supplies, including zero-rated items and the supplies of your partners, are taxable. The profits from financial services, goodwill, and the sale of capital property will not be included in the total revenue.

Exceptions To Small Supplier

Even if they are small suppliers, tax accountant Toronto team list that the following enterprises must register for GST/HST:

  • Taxi and limousine operators
  • Non-resident performers

Mandatory Registration For Small Supplier

A small supplier must apply for GST/HST registration within 30 days of the first taxable supply.

Nature And Level Of Purchases You Made

If you are not registered for GST/HST and make taxable goods purchases in the ordinary course of your business, you will not be able to claim input tax credits for the GST/HST paid. As a result, your margins will be reduced. For a small firm, therefore, the amount of GST/HST paid on purchases could represent a significant loss.

Tax Accountant Toronto team state that registering yourself voluntarily, even if you are a small vendor, allows you to recoup the GST/HST paid on your purchases in the form of input.

Disallowed Input Tax Credits

The following are some items for which you will not be eligible to take a tax credit even if you register:

  • Goods/services bought for personal use instead of business
  • Capital property
  • “Membership dues or fees to any club whose primary aim is to offer activities, dining, or sports facilities” (CRA).

Although it may be more time-consuming, you can claim your input tax credits up to four years after the end of the reporting period to which they apply. It means you won’t have to pay taxes in the same year.

Tax accountant Toronto team affirms that when a new registrant registers, he or she will be able to claim input tax credits for the GST/HST on purchases and paid on inventory held in hand.

How To Register For GST/HST

To be registered for the GST/HST, you must have a Business Number (BN). This BN will serve as your identification for communication with CRA.

“To set up a BN, a GST/HST account, and any other kind of account you wish to use CRA’s online service for Business Registration or send us a completed Form RC1, Request for a Business Number.

To get a business number or a program account by phone, call 1-800-959-5525 for our business inquiries department. For hours of operation, go to Hours of telephone service.

Before calling, have your document ready to answer all of the questions in Part A of Form RC1, Request for a business number and certain program accounts, as well as any other questions in the form about the program account you wish to open.”(CRA)