Tax Information
There are 2 taxes you may have to charge: GST (Goods and Services Tax) and PST (Provincial Sales Tax):
GST: When your gross revenue (total sales before deducting expenses) is $30 000 or more in any twelve-month period, you must register for GST. Most goods and services are taxed at a rate of 6%.
If your gross revenue is less than $30,000, then you may voluntarily register for and charge the GST. When making this decision consider the following:
Will it be an accounting hassle?
For some people, particularly those on a manual bookkeeping system, accounting for GST means another 2 columns to balance.
- If you're not registered for GST, you won't be able to take advantage of Input Tax Credit which allows you to deduct the GST you have paid on business expenses from the GST you have collected.
- Not charging the GST indicates your gross revenue is less than $30,000.
- What are your clients accustomed to? Do your competitors charge the GST?
For more information contact:
Canada Revenue Agency (CRA)333 Laurier Avenue West
Ottawa, ON, K1A 0L9
Tel.: 1-800-959-5525
web site: www.cra-arc.gc.ca
HST: On July 1, 2010, the retail sales tax was replaced with a more modern, value-added tax that will be combined with the federal GST to create a harmonized sales tax for Ontario.
