In this article, we will continue to discuss GST/HST for your business.
You can download the CRA tax guide below.
https://solidtax.ca/wp-content/uploads/2022/09/rc4022-21e-HST-Registrants.pdf
I provide consulting services to my US clients only. Do I need to get a HST number?
Your business is considered to be an export, which is a zero-rated supply. It means you don’t charge GST/HST from your clients, but you may claim your input tax credits for the GST/HST you paid in Canada.
It is your choice whether to register for GST/HST. The pro is that you can get a GST/HST refund from the CRA by claiming your input tax credits for the GST/HST you paid in Canada. The con is that you must keep records and file your GST/HST return every year.
I operate a child day-care business. Do I need to register for GST/HST?
No, day-care services are tax exempt. It means you can’t charge your clients GST/HST, and you can’t register GST/HST to claim input tax credits.
I am a financial adviser and get paid commission income by selling financial products – insurance and mortgages. Can I register a GST/HST number?
No, financial service businesses are tax exempt. It means you can’t charge your clients GST/HST, and you can’t register GST/HST to claim input tax credits.
I am a subcontractor in construction. I registered for a GST/HST number many years ago. I am going to retire. This year, my business income is less than $30k. Do I still need to charge my clients GST/HST?
Yes, before you cancel your GST/HST number, you still need to charge your clients GST/HST even if your business income is less than $30k. If your business income will be lower than $30k, you can cancel it, and then you don’t need to collect GST/HST anymore.
I am a part-time Uber driver, and the business income will be less than $30k. Do I need to get a GST/HST number?
Yes. This is an exception. Taxi and Uber drivers must register for the GST/HST, even if their income is less than $30k.
I incorporated my IT consulting business and charged my clients GST/HST a year ago, but I forgot to open a GST/HST account with the CRA? What should I do?
You need to backdate your GST/HST to when you first collected GST/HST. Please call the CRA at 1-800-959-5525 to open your GST/HST account and request to back date it. You will need to provide the three first invoices.
After you incorporate your business, you will get a business number from the CRA automatically. However, you still need to contact CRA to open a GST/HST account under this business number.
How to register GST/HST
You can register your GST/HST on the CRA website (search CRA business registration) or call 1-800-959-5525. The CRA will ask you the type of your business, and the estimated annual revenue. You can also choose GST/HST reporting period and year-end. The reporting period can be annual, quarterly, or monthly. The year-end can be Dec 31 or the same as the corporation year-end. Normally, we recommend our clients choose annual reporting to reduce workload.
