At the Timmins Economic Development Corporation we assist
clients in registering their business name through Service
Ontario. During this process clients can indicate if they
require Vendor's Permit for the Provincial Sales Tax (PST)
and Workplace Safety and Insurance Board (WSIB) coverage,
and the appropriate organizations will follow-up with them
based on the information provided. Obtaining a GST number is
separate from this process and clients must contact the CRA
directly.
Common questions regarding the GST include how to get a
GST number, whether or not their business needs a GST number
and GST rebates on business purchases. The following are
answers to some key questions: 1) Does my business have to
get a GST number? Until your business reaches $30,000 in
revenues for your last four quarters you do not have to get
a number or charge customers GST. Once you reach this level
you will have 30 days from this point to register for a GST
number.
2) Can I register for the GST regardless of revenues? You
can voluntarily register for GST even if you do not reach
this threshold. You might want to do this to be able to
claim input tax credits to recover GST paid to suppliers for
business purchases. Other reasons to register are if you
anticipate reaching $30,000 in sales soon or it is requested
by your suppliers. Note that once you register for the GST
you must charge customers the tax regardless of your
business revenue and must stay registered for a minimum of
one year, unless you cease operations.
3) If you have multiple accounts with the CRA for payroll
deduction, importing/ exporting or corporate income tax,
these numbers and your GST number will be the same. The only
difference will be the two-letter code before each.
4) If you issue an invoice to a customer and have not
received the payment by the reporting period, you are liable
to submit the GST billed. Similarly, you can claim input tax
credits for expenses you have been invoiced for but have not
yet paid.
5) If your business has less than $500,000 in revenues,
you only have to submit the GST to the CRA on an annual
basis. As your revenue increases so does the frequency of
submission to quarterly or monthly. You deduct the input tax
credits and submit the net tax to the CRA.
6) Often businesses start as a sole proprietorship and
will later choose to incorporate. When your business
structure changes you must obtain a new GST number.
There are other issues with the GST and some exceptions
to various rules. An excellent guide on the business number
can be found by visiting http://www.cra-arc.gc.ca/E/pub/tg/rc2/rc2-05e.pdf.
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