Entrepreneurship & Small Business

Ask me your GST/HST (and maybe PST and QST) questions!

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Deal Addict
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Dec 22, 2004
1973 posts
12 upvotes
Lifted, thanks for jumping in while I was gone AWOL!
poooofy2 wrote: Is only the hst I can claim if I show I am leasing a commercial vehicle 100% of the time.
I'm not sure what this means...
cklutz wrote: Hello,

I have a part-time photography business that is registered for HST. I am in Ontario. If someone in Alberta orders a print and I mail it to them, should I charge them the Ontario HST (13%) or the Alberta rate (5% since they don't pay GST)?

Thanks!
Simon
If you're mailing prints to Alberta, you should charge 5% GST, as the supply is made where the property is delivered (AB).
Abel4Life wrote: I am a sole prop. Let's say that I incur $2000 of travel expenses for a trip to Asia. None of it includes HST (as they were all incurred in Asia).

The client is going to reimburse for these expenses. I am also using the quick method so ITC implications.

When invoicing for these expenses, do I:

1) Just invoice for $2000 as a flat dollar reimburseable expense, in other words, no HST on top
2) Invoice for $2000 + HST (I wouldn't be surprised if the client paid the HST on this)
3) Something else?

Thanks!
I assume that your client is in Canada.

I would generally recommend invoicing $2,000 + GST/HST. The expenses you incurred are inputs into your business. Therefore, to the extent GST/HST was payable on your inputs, you would be entitled to claim an ITC. The fact that you separate out an input for reimbursement does not mean that your client should not pay GST/HST on those separately identified charges.

Generally, you would not charge GST/HST on reimbursed expenses when you incur those expenses as agent for another person. I doubt you incurred the expense of going to Asia as agent for your client.
vermit25 wrote: I can use some help/Advice.

1.
I have a new sole prop business, as of now I have not been charging HST.
I am still well below the 30k, But now I am selling products that I am paying HST for to my vendors, so if I don't charge HST I will lose money, Correct? (I know I can mark up my prices to include the HST, but that would make my prices seem higher)

2.
Once I register for a HST account, am I supposed to be paying the HST to CRA once a year or is it more often during the year?
Can I do this myself, or does my accountant have to do this?

3.
I am assuming that with a HST # I will also need a business bank account ? as of now Im using my personal bank acct (My business name is not my personal name)

4.
Does having a HST# make more work for my Accountant? Aka: Is my accountant going to charge me more than what he already charges me?

Thanks a lot!
1. If you don't register for GST/HST and charge GST/HST to your patrons, you will lose money in the sense that you will not be entitled to claim input tax credits (ITCs) for GST/HST that you pay on your expenses.

2. This will depend on your filing frequency. If you have less than $1.5 million in annual taxable supplies, you generally will be an annual GST/HST return filer. You may need to make instalment payments on a quarterly basis if your net tax (GST/HST Collected less ITCs) in the prior year was greater than $3,000.

You can file this return on your own. It doesn't need to be done by the accountant and it is relatively straightforward. The only information you need is: a) taxable revenues during the year, b) GST/HST collected during the year, and c) GST/HST paid during the year (i.e., ITCs claimed).

3. You will not need a separate bank account. Just ensure your accounting records are good and you can easily identify the GST/HST you collected and the GST/HST you paid.

4. If you complete the GST/HST return on your own, it won't increase your accountant's workload. I can't see the accountant's workload increasing significantly even if you don't complete the return on your own, so long as the accountant can easily determine the amount of GST/HST collected and GST/HST paid.
Sr. Member
Aug 8, 2010
950 posts
803 upvotes
GTA
Thanks for the detailed reply Batman.

Regarding:
batman321123 wrote: 3. You will not need a separate bank account. Just ensure your accounting records are good and you can easily identify the GST/HST you collected and the GST/HST you paid.
If I use a regular checking account (PC for example), will I be able to accept payments in my business name?

I know this is not really related to GST/HST, but was wondering if you or someone else can help.
Deal Addict
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Dec 22, 2004
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vermit25 wrote: Thanks for the detailed reply Batman.

Regarding:


If I use a regular checking account (PC for example), will I be able to accept payments in my business name?

I know this is not really related to GST/HST, but was wondering if you or someone else can help.
No idea. Best to check with your bank.
Sr. Member
Aug 8, 2010
950 posts
803 upvotes
GTA
What is my best method to pay my HST online?
I do not have a business bank account.
Deal Addict
Jun 9, 2003
4646 posts
746 upvotes
I started freelancing in 2014. Unfortunately I didn't do my homework I guess and didn't realize that I had to opt-in for the quick method of accounting. So based on what I've read, it's too late to elect for the 2014 tax year and also too late to elect for the 2015 tax year (I am an annual filer, this would be my first filing). Since I'm an IT (software development) consultant, my expenses are relatively low. I guess I've really screwed myself? Any options other than to eat the increased remittance amount?

UPDATE: So after calming down from my panic, I called up CRA just to see if I had understood things correctly. It was nicely explained to me that I could still make the election, since I had not made an election either way yet. I could do it online and it would let me know right away. What a relief that my election to use the quick method from my business' start date was approved. Crisis averted ;)
Deal Expert
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Apr 21, 2004
58648 posts
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Hey Batman,

How can consumers check that people charging HST (on ebay or online) have in fact registered with the CRA to collect taxes on goods and services sold?

Many thanks in advance.
Member
Sep 1, 2005
461 posts
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Vancouver
alanbrenton wrote: Hey Batman,

How can consumers check that people charging HST (on ebay or online) have in fact registered with the CRA to collect taxes on goods and services sold?

Many thanks in advance.
There is a CRA tool to use - http://www.cra-arc.gc.ca/gsthstregistry/

do need to know the business name though (that may differ from its operating name)

Invoices of registrants are required to have the busines number on it
Deal Addict
Dec 21, 2012
2058 posts
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Toronto, ON
1. Is it possible to open a business account with an BN? My company earns less than $30,000 so I am not required to register it, but every account I've looked at asks for a BN. If yes, please point me towards the correct accounts (I am assuming I can use my business name instead of my personal name when making purchases).

2. Can I still charge customers GST/HST without a GST/HST#, seeing that I am well below the $30,000 mark?

3. What is the current process and fees associated with a) registering your business and b) getting a BN/GST & HST#?

Thanks.
Deal Fanatic
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Nov 19, 2004
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Cambridge, ON
AFG786 wrote: 1. Is it possible to open a business account with an BN? My company earns less than $30,000 so I am not required to register it, but every account I've looked at asks for a BN. If yes, please point me towards the correct accounts (I am assuming I can use my business name instead of my personal name when making purchases).

2. Can I still charge customers GST/HST without a GST/HST#, seeing that I am well below the $30,000 mark?

3. What is the current process and fees associated with a) registering your business and b) getting a BN/GST & HST#?

Thanks.
1. They usually want the business number with the registered name.

2. No, you cannot charge GST without the number, regardless of how much you make.

3. http://www.cra-arc.gc.ca/tx/bsnss/tpcs/ ... u-eng.html
Deal Addict
Dec 21, 2012
2058 posts
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don242 wrote: 1. They usually want the business number with the registered name.

2. No, you cannot charge GST without the number, regardless of how much you make.

3. http://www.cra-arc.gc.ca/tx/bsnss/tpcs/ ... u-eng.html
I 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)?

Thanks again.
Deal Fanatic
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Nov 19, 2004
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AFG786 wrote: I 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)?

Thanks again.
If you are not registered, you can't charge GST or claim your ITCs on any taxes paid for supplies.

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.
Deal Addict
Oct 6, 2014
1315 posts
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How long do we have to file our T2? How come some corp requires to find 3 months after fiscal year, while others have 6 months? Thanks.
Deal Addict
Dec 21, 2012
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don242 wrote: If you are not registered, you can't charge GST or claim your ITCs on any taxes paid for supplies.

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.
Thanks a lot Don, much appreciated. I will consult a lawyer before launching the website. I will also be offering services alongside products so it will be best to get everything down accurately.
Deal Addict
Oct 4, 2006
3638 posts
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Toronto
Does one charge GST if my client is in the USA?
All of his business is in the States...I just provide consultation.
Thanks.
Deal Fanatic
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Nov 19, 2004
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blindemboss wrote: Does one charge GST if my client is in the USA?
All of his business is in the States...I just provide consultation.
Thanks.
Probably zero rated so, no.
Newbie
Jan 13, 2016
7 posts
1 upvote
Vancouver, BC
Hi there,
BC based business selling online. I know I have to charge tax to each province, but on what exactly? I had thought you charge GST and PST on the products but NOT on shipping. Now I'm not so sure.

1. In the cases of two taxes (a GST and PST) do you charge/collect/remit PST on products, and GST on Products + Shipping?
2. In the case of one harmonized tax, do you charge/collect/remit HST on Products + Shipping?
Member
May 2, 2010
386 posts
257 upvotes
Great thread. I am buying a 100% commercial property, with commercial tenants, in Toronto, with an incorporated company with an HST #. Do I have to pay HST on the purchase price? I believe not as I'll be paying (and collecting) thousands in HST once I assume the tenants' monthly leases. Please clarify how this works. Thanks.
Deal Addict
Jan 1, 2009
1066 posts
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Vancouver
BlueMorpho1 wrote: Hi there,
BC based business selling online. I know I have to charge tax to each province, but on what exactly? I had thought you charge GST and PST on the products but NOT on shipping. Now I'm not so sure.

1. In the cases of two taxes (a GST and PST) do you charge/collect/remit PST on products, and GST on Products + Shipping?
2. In the case of one harmonized tax, do you charge/collect/remit HST on Products + Shipping?
You charge GST/HST on shipping. You are arranging for the shipping of the product to the customer, on their behalf, which is a taxable supply. Unless the product is exempt or zero-rated (i.e. shipping goods outside of Canada), you always charge GST/HST on shipping or freight. Always been that way. You do not charge PST on freight.
Deal Addict
Jan 1, 2009
1066 posts
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hotski7 wrote: Great thread. I am buying a 100% commercial property, with commercial tenants, in Toronto, with an incorporated company with an HST #. Do I have to pay HST on the purchase price? I believe not as I'll be paying (and collecting) thousands in HST once I assume the tenants' monthly leases. Please clarify how this works. Thanks.
All commercial property is subject GST/HST. If you are GST/HST registrant, you have to self assess the HST on the acquisition of taxable real property on line 205 of your GST/HST return. But you can also claim and input tax credit (ITC) on the same return since you are using that property primarily in commercial activities. You also have to collect the GST/HST on the leases - as those are taxable supplies.

If you are not a GST/HST registrant, you still have to pay the GST/HST on the purchase price. The vendor will collect it from you. You may have to register for the GST/HST if your leases exceed over $30,000 in the last 4 calendar quarters or any calendar quarter.
Newbie
Jan 13, 2016
7 posts
1 upvote
Vancouver, BC
Thanks.

now in the case of having not charged it on shipping (my error, I thought you didn't need to), do I just self assess?

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