GST and QST Considerations For New Business Owners

The Goods and Services Tax or GST is a consumption tax that is charged on most goods and services sold within Canada, regardless of where your business is located.  Subject to certain exceptions, all businesses are required to charge GST , currently at 5%, plus applicable provincial sales taxes.  A business effectively acts as an agent for Revenue Canada by collecting the taxes and remitting them on a periodic basis.  Businesses are also permitted to claim the taxes paid on expenses incurred that relate to their business activities.  These are referred to as Input Tax Credits.

Does Your Business Need to Register?

Prior to engaging in any kind of commercial activity in Canada, all business owners need to determine how the GST and relevant provincial taxes apply to them. Essentially, all businesses that sell goods and services in Canada, for profit, are required to charge GST, except in the following circumstances:

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Noteworthy - Sept 19.2010: All About Tax

CRA Targets Tax Shelters:

The CRA is auditing "gifting tax shelters" ,which mainly target middle income earners.  It seems that the tax shelters have been falsifying charitable donation amounts eg. a donation of $30 will turn into a donation receipt of $100 resulting in a tax credit up to $45.   It is estimated that 170,000 taxpayers will be assessed for about $2.5 Billion.

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Small Business Confidence Declines in August

According to CFIB's Business Barometer® Index , small business confidence for August fell for the third consecutive month to 64.9 last month, down from 65.7 in July.  The 2010 peak was reached in March when the index was at 69.9.  An index result that exceeds 50 indicates that owners expect their business to grow in the following year.  The figure is significantly higher that it was at the end of 2008, when it was below 40.
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