JENNIFER HALEY, CPAHi there, I'm Jennifer Haley, CPA. I'm here to help business owners get a handle on their finances so they can get back to doing the things they love. Categories
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January 2022
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THE $30,000 RULE10/6/2020 There is always confusion on whether a business needs to set up a GST/HST account. Just because your business is earning money, it doesn’t necessarily mean that you need to set up a GST/HST account with Canada Revenue Agency (CRA). If your business does charge GST/HST to its customers on services/products sold, the business is required to remit these funds to the CRA. You will also be eligible to claim the GST/HST your business pays on business related expenses, these are called input tax credits (ITCs). The $30,000 Rule This rule is often the beginning of the confusion. If your business makes less than $30,000 in a total of 4 consecutive calendar quarters, you are considered a small supplier and are not required to open a GST/HST account. You would not charge this GST/HST to your customers. Once your business makes revenue of $30,000 in 4 consecutive calendar quarters or less you are no longer considered a small supplier and are required to open your GST/HST account and begin charging GST/HST to your customers. Here are the three scenarios that are most common and help you understand when you are no longer considered a small suppler and must open a GST/HST account. See the scenarios in the below table to determine if you are a small supplier:
Other Reasons to Register for a GST/HST Account
Even if you have not reached the $30,000 threshold there are still other reasons you may want to register for an account:
I hope this was of help to you. Let me know if you have any questions. Jennifer H. Xo
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