• Last Updated:
  • Sep 7th, 2017 10:08 pm
Aug 8, 2017
33 posts

Tax (Under 30K gross)

So, I am planning to step out into entrepreneurship.
I keep reading how having under $30,000K gross in any fiscal year, means I do NOT have to register, or collect TAX.

This almost seems in a way, too good to be true for potential customers. If I am correct, no matter what I sell, the customer does NOT have to pay ANY tax in any way if I choose not to collect?

I can understand this when I sell across the Canadian border to the US. But I am somewhat weary here of oversimplifying something when it comes from province to province sales. I don't want to find out the hard way, if I sell from Ontario to someone in BC (for example), there is something I'm supposed to add on to charge for the government/municipality/etc and will bite me later on.

Thanks in advance for any reply on this. I'm definitely no expert on taxes here, and have found these forums so far quite enjoyable to read through.

P.S. Why is it I never see small start-up companies advertising products as 100% tax-free? Would seem this should be logical?
4 replies
Jul 24, 2016
14 posts
If you aren't registered for HST you will not be able to claim HST(ITCs) paid on your expenses. Depending on the type of business you plan on starting the ITCs can be significant, especially if you carry inventory.
Aug 8, 2017
33 posts
I understand that, but it's not like I am in the thousands. At least not any time soon.
Jun 25, 2011
322 posts
If you are small supplier which means your prior quarters or the sale in any month will not throw you over $30K small supplier limit then you don't have to register for GST/HST or charge any Excise Tax. The downside is you won't be eligible to claim ITC. Some times it can act in your favor if you are small guy and you don't have to charge GST/HST which means you can compete at lower price than your competitor. Be careful with your $30K threshold though. If you exceed that limit in any quarter or any sales which you push over the small supplier limit then you will be on hook to remit GST/HST even if you did not collect it.
Sr. Member
Jan 1, 2009
934 posts
Note that your $30,000 threshold applies to taxable supplies (i.e. goods or services) made in Canada or outside of Canada, in the four previous calendar quarters, or any other the four previous quarters, even if they are zero-rated (i.e. exported to the US). For instance, if you export goods totaling over $30,000 in one quarter or over the four previous quarters to USA, you are charging zero percent GST/HST. You have 29 days following that date which you crossed the threshold to register for GST/HST, even though you collected it GST/HST at zero percent. Once registered, you are entitled to input tax credits (ITCs) for any taxable purchases and expenses consumed in the business. If your taxable supplies (i.e. sales of goods or services) are expected to be less than $30,000, than don't worry about.

Note: not being registered for GST/HST makes the business seem like a run of the mill operation. Also, once registered for GST/HST, you must disclose your GST/HST number on invoices, amongst other things.

PS: CPA; GST/HST expert.