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HST Tax Filing
What you should know when starting a new business
Here in Canada gernerally (there are exceptions) business that has less than or up to $30,000 in annual gross income does not need to collect a sales tax nor do they have to register as a participant in the HST. You can however voluntarily register also if it is in your favor. We can determine if it is to your benefit to register.
In order for a business here in Ottawa to ascertain whether they qualify to meet this cutoff point the global revenue of the associated channels become part of the overall financial picture of the business. This translates into the inclusion of the shareholders, partnerships, corporations, individuals, or trusts that take part in the operation.
“Each business which is either registered or not is considered a supplier.”
What are the allowable deductions?
In order for a business here in Ottawa to ascertain whether they qualify to meet this cutoff point the global revenue of the associated channels become part of the overall financial picture of the business. This translates into the inclusion of the shareholders, partnerships, corporations, individuals, or trusts that take part in the operation.
This process works through looking at the combined annual revenue that is taxable to see if it surmounts the $30,000 cutoff. Having stated this aspect of the HST, any Ottawa business that earns this amount and more are required to register as a participant in the program. Each business which is either registered or not is considered a supplier.
“It is advantageous for an Ottawa business to register”
A business that earns revenue below the cutoff is considered a small supplier. At the same time such a business may register voluntarily in order to qualify in claiming ITCs for any HST/GST paid on any goods they pay for that aid in the operation of the business. As a rule, this aspect of the HST is highly suggested to small suppliers to do so.
In any event, when considering a charitable or public sector business that are other means in which to determine whether or not such a business entity qualifies as a small supplier or not. Nevertheless, it is advantageous for an Ottawa business to register when they receive taxable supplies from higher earners. Specifically, when it is a new business.
New Business in Ottawa
Generally speaking, it is a great thought to register as a newly formed Ottawa business as quickly as you can after becoming eligible. The reasoning behind this statement is it helps as a preparatory step for an advanced tax payment strategy. Of course, if the business generates taxable or non-rated supplies registering solidifies the expenses of GST/HST paid as recoverable income, to an extent.
The recoverable portion comes from inventory, pre-paid services, and capital property purchases that are on hand at the time of registration. This makes it important to understand this aspect of the GST/HST. When to Report
The reporting periods vary between businesses as a requirement of the total taxable annual revenue that the associated group earns, thus most choose to report quarterly on average. On the other hand a business that earns greater that $6 million annually, has to report on a monthly basis.
Any business that earns $1,500,000 annually reports needs only to report annually. Remember these amounts include all associations that are integral to the operation of the business overall. However, a small supplier earning this amount may elect to file monthly or quarterly, If not they are expected to file annually.
Nevertheless, businesses registered with greater than $1,500,000 in taxable annual sales revenue must file their returns for HST/GST electronically. That said there are three different electronic filing methods to choose from. However, in Ontario businesses are required to utilize NETFILE for HST/GST filing.