Nothing is ever easy, right?
Throw in owning a business and, boy, don’t you complicate your life.
Oh wait … then there’s charging taxes!
We went into the whats and whys about charging the Canada Revenue Agency’s Goods and Services Tax on Tuesday. When we’re doing business in Alberta and dealing only with Alberta customers, we only have to charge the five per cent GST.
But what if you’re doing business outside of Alberta? That’s a reality if you want to grow and expand your products and services.
When it comes to provinces with a provincial sales tax — Quebec, Manitoba, Saskatchewan and British Columbia — you should register as a Provincial Sales Tax Vendor with each of the provinces where you’ll be doing business. You are expected to collect and remit the sales tax to each of those provincial governments.
Then you throw in the HST.
The same rules as GST
If you are doing in excess of $30,000 of sales, you have to register for the GST. Your GST registration number also applies to HST.
Five provinces charge the Harmonized Sales Tax (HST), a blend of the GST and PST:
- Ontario: 13 per cent
- New Brunswick: 13 per cent
- Newfoundland and Labrador: 13 per cent
- Prince Edward Island: 14 per cent
- Nova Scotia: 15 per cent
The CRA provides a calculation table to get you started.
Like the GST, the HST must be noted on the invoice and collected with the payment of services. It must be reported with your GST report.
Make the jump
The easy way out, especially if you’re a sole proprietor starting out, is to do business only in Alberta.
But what’s the old saying? No pain, no gain.
If you want to grow your business, you may need to bite the bullet and look beyond the Alberta border for clients and customers.
And then you’ll have to charge PST or HST.
Here to help
A1 Accounting, a Calgary accounting and bookkeeping firm, is here to assist you with your taxes and planning. We specialize in personal taxes and small-business accounting and financial services. Contact one of our tax specialists and we can help you optimize the tax benefits and credits available to self-employed individuals and small businesses.
Fill out our contact form or give us a call at 403-226-8297.