For Ontario based companies that sell products and/or services, once sales exceed $30,000, GST/HST (Goods and Services Tax/Harmonized Sales Tax) must be collected from customers and remitted to the CRA and as such, the business must register for a GST/HST account. The only exception is a business sells exempt supplies. If sales are below $30,000, a business can voluntarily register for a GST/HST account.
In order to receive a GST/HST account number, a company must first register for a business number with the CRA. A business number also allows a company to register for one or more CRA program accounts including GST/HST and payroll deductions accounts.
With a GST/HST account, businesses can claim the GST/HST paid on purchases or expenses made by claiming the input tax credit on their GST/HST return. If the total input tax credit is more than the GST/HST collected from sales, then the business will receive a refund. If the total input tax credit is less than the GST/HST collected, then the business remits the difference. The input tax credit is the reason businesses may choose to voluntarily register for a GST/HST account. A list of common eligible purchases and expenses can be found here.
We can help with the set up of your accounts and answer any questions you may have. Contact us to learn more.