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Do I need to register for GST?


Many entrepreneurs ask this question when starting a new venture.

While you are not required to register for GST until your annual gross revenues exceed a minimum threshold (currently $30,000) we generally recommend that any business register as soon as possible. Three good reasons include:

  1. Unless you are a GST registrant you can't claim GST input tax credits (GST paid on business expenditures). If, as a GST registrant, your input tax credits exceed GST collected on sales you may claim a refund of the excess from Canada Customs and Revenue Agency. If you're not a registrant the GST paid on expenses is included as part of the expense when computing net income - your tax liability is reduced by your marginal tax rate.
  2. You're advertising the fact that you're a small venture. If your customers are other businesses the GST that you charge on sales does not represent a direct expense for them (see above) it becomes a flow-through and most businesses expect to pay GST.
  3. Companies that are required to register for GST must remit it to Canada Customs and Revenue Agency - even if it hasn't been collected from the customer. By registering for GST upon starting your business you can't inadvertently surpass the $30,000 threshold and find yourself being registered retroactively and having to pay GST not billed to clients.

CorpCanada Services Inc., 2-200 Colonnade Road South, Ottawa, Ontario K2E 7M1