(Newswire.net — February 26, 2020) —
Starting a business can be daunting. There are many things to consider. Location, staff, inventory, and target market immediately come to mind. It’s likely that as you read that, Goods and Services Tax (GST), didn’t feature in your train of thought. You may also be an immigrant where the tax system where you’ve come from may vastly differ from that of Canada.
What is GST?
Goods and Services Tax (GST) is a 5% tax levied by the government on various transactions within Canada. It was implemented in 1991, replacing Manufacturer’s Sales Tax (MST), which at the time was a hidden tax of 13.5%.
Is GST Charged on All Transactions in Canada?
The federal charge is payable on some transactions, such as property sales and retail items. Other essentials such as medical services, day-care services, groceries, and long-lease home rental payments are exempt or zero-rated.
I Want to Open a Business in Canada
Virtually all businesses in Canada are required to register for GST unless they are deemed to be a ‘small supplier,’ but the tax of any kind is a tricky business. It’s always safe to err on the side of caution.
Entrepreneurial individuals open enterprises for many reasons. They’re more self-determined, they want more flexibility through deciding their hours, it’s more rewarding to work for yourself, or because they don’t want to work for a boss. Sadly, these well-meaning people sometimes get caught flouting the law, albeit unintentionally.
Tax evasion is a serious crime in any country. In Canada, in particular, various penalties can be imposed if the Canada Revenue Agency catches you, either hiding assets, protesting the payment of taxes, or involved in tax schemes.
There are specific parameters for new business owners when it comes to registering for GST. Obtaining legal advice regarding GST registration may cost some money in the beginning, but it will save you thousands in the end. The CRA can not only jail you for not paying taxes. It can rule that you have to pay 200% in penalties. That’s a lot of Dollars!
Some Canadian Provinces levy additional taxes. If you’re in Ontario, invest some time and money in a Toronto GST Lawyer, a professional that will only guide you on the right path, one that will teach you how to collect GST and submit it to the CRA. Some attorneys even offer the service of filing these returns on their clients’ behalf.
What’s it Going to Cost?
Your lawyer will have negotiated his/her fees and any other contractual terms of payment before the commencement of any work, so you will know what your financial outlay will be.
The Canadian government doesn’t levy GST on the registration costs, because the process is regarded as a financial service, which is also zero-rated.
Still Not Entirely Convinced?
The majority of businesses in Canada are legally required to have a GST number. An attorney that specializes in business types and different taxes can aid with registration paperwork and become a trusted advisor – not only on tax-related issues. Later you may require legal services for alternative reasons. Whether it’s GST, PST, or HST, do the right thing – be clever, avoid the gavel. Get legal!