Looking for an easy-to-understand guide on GST/HST numbers that answers your key questions? You’re in the right spot! In this post, we will break down what a GST/HST number is, when to get one, how to get one, exempt services, charging GST/HST, and filing GST/HST.
Breaking down GST/HST Numbers 💸
What is a GST/HST Number 🪪
First things first, what even is a GST/HST number? A Goods and Services Tax (GST)/Harmonized Sales Tax (HST) is a specific number for tracking your sales tax.
Sales tax is meant to be paid by the end consumer, not by a business owner purchasing supplies. That means you need to know how much you spent on taxes when buying supplies used for items you sold, and how much tax you collected from customers.
Spent more than you collected? You’ll get a tax refund. Collected more than you spent? You’ll owe the government some money.
When to get a GST/HST Number 🕑
- If your business makes less than 30K a year, you are considered a “small supplier” and don’t need a GST/HST number.
- If you anticipate your business will be making over 30K this year, then it is a good idea to register ahead of time to avoid any penalties.
- If your business already makes more than 30K a year, you need to register for a number ASAP.
- You can also check out this eligibility table from the CRA for when to register.
How to get a GST/HST Number 📈
- Check your eligibility using the info above
- Register for a business number – read through the CRA’s info and register here
- Register for a GST/HST number through the CRA here
Exempt Services ❌
Some services and supplies are exempt from GST/HST, meaning you don’t have to charge GST/HST. If your business only provides exempt services and supplies, you usually cannot register for a number. Aside form music lessons, if you’re an artist or creative, you’re most likely not selling an exempt good/service, but you can check the list to make sure here.
Charging GST/HST 💳
Now that you have a GST/HST number, you will have to add that percentage onto your invoices to let your customers and clients know it is being applied.
GST/HST rates vary by province, and are charged based on where the product is being supplied (if your Vancouver store ships to Toronto, you charge 13% Ontario HST).
Make sure to hang on to your own records and receipts as well so you can calculate:
- the amount of GST/HST you collected
- the amount of GST/HST paid and payable on your eligible business purchases and expenses
- the amount of tax to be refunded, rebated, or deducted from your net tax
If you don’t already have a separate bank account for your business, it is a real game-changer when charging GST/HST. It not only keeps your personal and business finances separate but also streamlines the entire record-keeping process.
Filing GST/HST 📂
Once you have started charging for GST/HST at the end of each reporting period, you have to:
- file a GST/HST return (more info below)
- pay the net amount of GST/HST
When filing your taxes, your GST/HST will be filed separately from your income tax. Your personal due date for this will be on your GST/HST return (Form GST34-2). You can check out this CRA resource on what to include in your GST/HST return.
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