Reg­is­ter­ing for a GST ac­count

Asian Journal - - WORLD -

on their sales, so they are only pay­ing tax on the dif­fer­ence or value added amount. This pre­vents dou­ble charg­ing of the tax at each step of the sup­ply chain. In the end, the tax is borne by the end con­sumer. Gen­er­ally, the GST rate is 5% ex­cept for cer­tain items that are ei­ther zero rated or ex­empt (basic gro­ceries, agri­cul­tural prod­ucts, pre­scrip­tion drugs, etc.).

When de­ter­min­ing if your com­pany has to reg­is­ter for GST, it needs to first de­ter­mine if it is car­ry­ing on busi­ness. Car­ry­ing on busi­ness means that the busi­ness is fre­quently or reg­u­larly do­ing busi­ness, not just a one off sale. If a com­pany is con­sis­tently do­ing busi­ness, then it needs to de­ter­mine if it is car­ry­ing on busi­ness in Canada. Fac­tors con­sid­ered in car­ry­ing on busi­ness in Canada are: • The place where agents or em­ploy­ees of the non-res­i­dent are lo­cated; •The place of de­liv­ery, where the ser­vice is per­formed, or man­u­fac­ture/ pro­duc­tion;

• The place where pur­chases are made or as­sets are ac­quired;

• The place from which trans­ac­tions are so­licited;

• The lo­ca­tion of as­sets or an in­ven­tory of goods and lo­ca­tion of a branch or of­fice; • The place where busi­ness con­tracts are made; • The place of pay­ment and lo­ca­tion of a bank ac­count; and

•The place where the non-res­i­dent’s name and busi­ness are listed in a direc­tory.

If your com­pany is con­sid­ered to be car­ry­ing on busi­ness in Canada, then it will be re­quired to reg­is­ter for GST. You can also reg­is­ter vol­un­tar­ily. How­ever, the cost ver­sus ben­e­fit of reg­is­ter­ing should be looked at first be­fore vol­un­tar­ily reg­is­ter­ing as reg­is­ter­ing re­quires on­go­ing fil­ings.

An­gela Hard­bat­tle, Dipl. T (Hons), CPA, CA, Man­ager

Man­ager,

Group CPA’S Gil­mour Email: faqs@gil­mour.ca

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