FAQ - GST Issues

When to Register for GST

When starting a business (incorporated or unincorporated), an important issue to consider is GST registration.

There are a number of specific issues and exceptions relating to when GST registration is required, however, the basic rules applicable to most entrepreneurs starting a business are:

  1. Is your business providing taxable supplies in Canada? (sale of goods or provision of services); and
  2. Is your business considered a small supplier? As a basic rule, a small supplier is a business with less than $30,000 in total revenue (from worldwide taxable supplies from the business and those of your associates) in any single calendar quarter and in the last four consecutive quarters.

For GST registration, if your business is making taxable supplies, you can register for GST immediately or follow the registration guidelines to determine the effective date of registration required (refer to specific details and examples in the CRA Hyperlinks below). Please note, if the decision is made not to register for GST upon starting a business, it is important to understand when GST registration would be applicable to your business. There are specific deadlines for registration following supplies that take your business over the small supplier threshold of $30,000 that must be adhered to. In addition, it is important to monitor when GST registration would be required for your business as there could be instances where retroactive removal of GST effectively collected on your revenue deposits would be required, even though GST registration has yet to take place.

What Fiscal Year and Reporting Period do I use when registering for a GST account?

When registering for a GST number, it is really important to communicate with CRA accurately regarding your desired fiscal period selection (fiscal year) and your desired filing frequency (reporting period).

Fiscal Year: For self-employed individuals, the fiscal year selection for GST purposes should normally be December 31. For corporations, the fiscal year selected for GST registration should correspond with the fiscal year-end chosen for the corporation. Talk to your accountant about the best fiscal period for your business.

Reporting Period: The reporting period for GST is most often the choice of the registrant unless certain revenue thresholds are present. For the sake of simplicity, businesses with revenues of less than $1,500,000 can choose a reporting period of monthly, quarterly or annually. Each has implications that will affect your business for years to come.

Presentation of GST Number

When you are registered for GST, you must charge GST on your taxable supplies, and the GST number must be on your receipt or invoice provided to your customer. The same concept applies to invoices from vendors. Ensure that GST input tax credits (GST paid) are only recorded in your bookkeeping records based on receipts or invoices that contain this information.

How do I cancel/close my GST account?

To close your GST account, all of the following information is required:

  1. Business number (GST number)
  2. Legal name of the business
  3. Effective cancellation date
  4. Reason for closing the GST account

Please refer to the CRA links below for more information about closing a GST account (or making changes if applicable).

Do not close your GST account without first seeking professional advice. You may trigger a deemed disposition of assets on the closing of the GST account. There are often other factors on the balance sheet of businesses to consider prior to cancellation of a GST account.

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