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You may have to collect GST (Goods and Services
Tax) and PST (Provincial Sales Tax) as follows:
GST: If your gross revenue (total sales before expenses)
is $30,000 or more in any twelve-month period, you
must register for GST. Most goods and services are taxed
at 6%. If your gross revenue is less than $30,000,
then you may voluntarily register for and charge GST.
When making this decision, consider:
- Will it be an accounting hassle? For some, particularly those
using a manual bookkeeping system, accounting for GST means another
two columns to balance.
- If you don't charge GST, you won't be able to take advantage
of the Input Tax Credit. This allows you to deduct GST you have paid
from that which you have collected.
- Not charging the GST will inform everyone that your gross sales are
less than $30,000.
- What are your clients used to? Do your competitors charge the GST?
For more GST information, contact:
Canada Revenue Agency
(CRA)
333 Laurier Avenue West
Ottawa, ON, K1A 0L9
Tel: (800) 959-5525.
CRA conducts FREE GST seminars and other CRA issues.
Call the preceding phone number for information and registration.
PST: Generally, if you are selling a product,
or performing labour to install or maintain a product,
you must charge 8% PST. However, there are many exceptions.
Contact the local
Retail Sales Tax Office (tel.: 746-9200) of the
Ontario Ministry of Finance to determine whether you should
charge PST.
If so, you must obtain a Vendor's
Permit. You can apply by phone or, if you register
your business name, from an OBC
computer terminal.
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