Get Your Canadian Goods and Services Tax (GST) Number Through Proper GST Registration

The information contained in this article is not intended to replace professional legal, accounting, or tax counsel. Note that the specifics of the information provided herein may change over time and vary depending on where you live. Get in touch with an expert for company-specific guidance.

Whether you've been in business for years or are just getting started, the tax code may seem daunting. We understand that it can seem overwhelming to try to learn all the ins and outs of the various tax laws, including what you need to do and when you need to do it.

Let's pretend you've been running your company for a while. You have attracted new customers, and your earnings have increased. You were recently advised to investigate Goods and Services Tax registration by a colleague in the business world. However, that...

In what ways are GST Numbers useful?

To keep tabs on GST or HST collection, reporting, and remittances, the Canada Revenue Agency (CRA) issues a Goods and Services Tax (GST) number, also known as a business number. While a GST number is required for any business dealings with the Canada Revenue Agency, it is also used for anything else you might be involved in.

A GST number is required for filing corporate income tax returns, for instance, regardless of your business structure. The GST number is also used for reporting and remitting payroll taxes if your company has employees. Once you have your GST number, it must appear on all future invoices.
However, does your company need a GST number? How do you even know that?

Are You Definitely Going to Want a GST Number?

There is a mandatory registration process for a GST number that most Canadian businesses must complete. In fact, unless the Canada Revenue Agency classifies the company as a "small supplier," it is illegal for a Canadian company to not have a GST number.

The Canada Revenue Agency classifies any business with quarterly taxable revenues of less than $30,000 (before expenses) as a "small supplier." You should keep in mind that this does not account for provincial sales taxes or capital gains.

However, depending on the nature of your business, you may still be required to register even if you meet all the other criteria for this Small Supplier rule. A GST number is required if you plan to run a taxi or limo service. As another example, if you are a non-Canadian speaker, singer, or performer who sells tickets to events in Canada but does not live there, you are required by law to obtain a GST number.

In Canada, the Goods and Services Tax (GST) registration deadline is set for July 2021, and all businesses, regardless of location, that operate a marketplace or other platform offering digital products to Canadian citizens, such as online music streaming, must comply. Both GST and HST, as applicable in the province of sale, must be collected and remitted by these online marketplaces.

Is It Still Advisable for a Small Supplier to Get Registered?

The Canada Revenue Agency (CRA) states that small suppliers are exempt from obtaining a GST number; however, having one can be useful. For instance, if you are a business owner and you pay GST or HST on any purchases throughout the year, you can get that money back at the end of the year by claiming Input Tax Credits. As a new business owner, it is wise to register for GST so that you can recoup any taxes paid on supplies and initial inventory.

What Is the Distinction Between Goods and Services Tax (GST), Provincial Sales Tax (PST), and Harmonized Sales Tax (HST)?

The acronyms GST, PST, and HST stand for:

Consumption Tax on Goods and Services
Almost all transactions in Canada are subject to the Goods and Services Tax (GST), a federal sales tax.

VAT in the Province
Almost all transactions in a province are subject to a sales tax known as the PST.

VAT Harmonization
Harmonized sales tax (HST) is a tax levied on nearly all sales and purchases that is a combination of the sales tax in that province and the GST.

Revenu Québec is responsible for these tasks if your company is located in or does business within Québec. Paying Revenu Québec and the Canada Revenue Agency (CRA) are both your responsibility if you run a business in Québec and elsewhere in Canada. A trusted financial advisor or accountant can be an invaluable ally in these perilous times.

At What Point Should You Register for GST?

One common misconception is that a GST number must be applied for immediately. And while that undoubtedly helps, the reality is that it really depends on the nature of your business and its anticipated yearly revenue. To recap, businesses are only required to register if their expected quarterly revenue is more than $30,000, while those expecting quarterly revenue of less than $30,000 are exempt from doing so.

What if, however, you have a fantastic fiscal quarter or two? How important is it to sign up? Probably not For a company to be required by the Canada Revenue Agency to apply for a GST number, they must have accumulated more than $30,000 in sales over the course of four consecutive quarters. It's important to note, however, that you need to add up the results of the previous four quarters. You must apply for a GST number if the sum is $120,000 or more. However, if you want to claim those input credits mentioned above, you should register as soon as possible, even if your quarterly and annual totals are below the threshold.

For GST/HST purposes, you are no longer considered a small supplier if your quarterly revenue is more than $30,000. If your annual sales are greater than $30,000, you are required to file a GST/HST return on the goods and services that contributed to your success. Visit the CRA website for further details.

What Does It Mean That Your Small Supplier Status Was Revoked?

In Canada, the Canada Revenue Agency no longer considers a company to be a "small supplier" if it has quarterly sales of more than $30,000. To begin collecting GST from your customers and remitting it to the CRA, you will need to apply for a GST number. You have 30 days from the date you cross this threshold to apply for a GST number. The Canadian Revenue Agency (CRA) website has more details on how and when you must register to collect GST/HST.

The GST Number Application Process:

If you're a business owner in Canada, you can get your GST number by contacting the Canada Revenue Agency. There are three easy options for submitting an application:

• Digitally • Via Post

Through Telephonic Means

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