If you are not registered, you can't charge GST or claim your ITCs on any taxes paid for supplies.AFG786 wrote: ↑May 10th, 2015 3:44 pmI am going to assume the same follows for a sole proprietorship?
If I don't charge tax, can I still claim the tax paid on supplies? I am assuming I won't be able to claim other expenses like vehicle, events, gas, food, trips, etc.
Is there any additional requirements if you're importing from the United States (dropshipping) to Canada, and also selling to the United States (supplier is in the US)?
That said, you may not get the GST back but you can claim your expenses. Normally you would not claim the GST as an expense since you would file those in your GST return. However, since you are not doing that, you should be able to include the tax in your overall expenses.
As for what expenses you can claim, it has to be expenses that you incur to run your business only, and cannot include any personal use part. So if you drive to see a client, you can claim that portion of the vehicle expense, percent business use vs. percent personal use. The records need to be clear and things such as insurance better include business use. If your car insurance is a personal use policy only, then the CRA will look at that as not using your vehicle for business use. The rules help explain what you can claim and how much. Something like food, only 50% of the cost can be claimed and only if you are on a business trip for multiple days. You can't just claim your lunch for the day.
Selling in the US or Canada shouldn't make a difference until you register for a business number.
There is a lot of info on the CRA site. You should either take the time (and there is a lot to know) and read or talk to an accountant if you don't want to do the research yourself.