Goods and Services Tax (GST)
The Goods and Service Tax (GST) is a tax that applies at a rate of seven percent (7%) to the supply of most goods and services in Canada. All businesses, exceeding a gross yearly revenue of more than $30,000 must register for the GST at Canada Revenue Agency (CRA). If yearly revenue is less than $30,000 registration is optional; however, it may be beneficial to register anyway, depending on the nature of the business. If you do not register, you will not charge GST to your customers but neither will you be able to apply for a refund on the GST you pay on your business purchases. Mandatory registration required for persons who operate a taxi or limousine service. CRA frequently offers a free workshop that provides general information to help you apply GST. Topics include handling the administrative aspects of GST and completing a GST return. http://www.cra-arc.gc.ca/events/menu-e.html or http://www.cbsc.org/sask/whats_new.cfm
and in most provinces for the PST to apply it has to be for a good not a service.
Originally posted by hometownhosting I double posted so I am changing this one....
Do those of you who are based in Canada have it so that people in your province or within the country pay tax? If so how do you go about doing this?
Couple different ways to go about this. If you are canadian bussines and if you are registered to collect GST (eventualy they will warn you that you should register ), then you have to charge it to any canadian sales. If you are selling something to someone in the same province as you are then you have to collect PST as well. But, if you use third US based party to collect your payments, like 2co, then there is no need to charge any taxes as you are technicly selling your stuff to 2co, and 2co is selling it to your clients.
But, if you use third US based party to collect your payments, like 2co, then there is no need to charge any taxes as you are technicly selling your stuff to 2co, and 2co is selling it to your clients.
That sounds very shady. I am sure Revenue Canada wouldn't see it that way. As one of your competitors in Canada who is required to and does charge GST I find this objectionable.
Have you asked CCRA for an official ruling on this "loophole"?
Can you defend your practices if someone calls the snitch line?
We charge GST to Canadian clients only, we are in BC so we have the 7.5% PST to deal with also, however we do not charge the PST to our clients inside or outside of BC. Our accountant checked with Victoria on this one and it was really a cloudy issue concerning PST so they recommended we didn't bother charging it.
I notice my fellow BC hosts are a mixed bag too, some are charging PST on everything while others aren't. The only time I have been charging PST is when I sell some computer hardware or physically work on a computer which is taxable (any service done on a physical products apparently).
ModernBill handles the GST just fine once you setup the tax zones. You also need to adjust the percentage for the HST in the Maritimes.
Also, keep in mind if you remain under $30,000 gross each year you do not have to register for a GST number and do not have to charge it, but if you do go over and haven't been charging it you may get stung with paying during times you weren't charging it.
Just make sure you keep a receipt for everything and get a bookkeeper or accountant sooner rather than later, it will help big time and they can also better explain some rules for you.
The latest version of ClientExec has a area for doing sale tax. You can enter the sales tax so that if a person indicates they live in Canada on the signup form, they are automatically charged sales tax. You can also setup a seperate sales tax for the province you are in as well.
In regards to the registering for GST, if you do register for GST, then you can claim any GST you payout for your business against the GST you receive. Buy a vehicle for business purposes, and you can claim the GST on the first $24,000.00 of the purchase price.