I’m in the very early stages of starting a small business in Ontario, Canada…
For the sake of this message, let’s just say I’m going to be selling widgets.
I plan to sell these widgets internationally, as well as within Canada.
I have registered my business name with the Ontario government and have my business number. I am shortly going to apply for a vendors permit.
Now I understand that if I make profits of under $30,000 in a year, I do not have to apply for a GST number and I can sell my widgets without GST.
While I don’t anticipate making anywhere near $30k for the first year or two, is there an advantage to me getting a GST number now?
As long as I can prove that the goods were shipping out of Ontario/Canada, am I correct that I don’t have to charge PST/GST respecitively…
That is correct. If you do not register, then you *cannot * collect GST. If you do register, you must collect it.
Yes, usually. If your business has input costs, e.g., parts that you buy from Acme Widget Parts, out of which you make the widgets, or perhaps you buy the widgets pre-made from Acme Widget Assemblers and just resell them for a profit. If you have a GST number, then you can get the GST refunded on these input costs. If you don’t, you pay the GST, and you have to absorb it into your costs. What’s more, since you can’t collect GST from your customers, you have to charge them extra to cover your higher costs. All in all, your customer winds up paying about the same, except say your customer is Acme MegaWidgets, and the widgets are an input cost to them; then they wind up paying more for your widgets, because you didn’t charge them GST and they can’t get an input tax credit refund.
Fiscally, it’s almost always better to have a GST number for your business, because almost every business has input costs. It also means that if you accidentally make way more than you expected and earn more than $30,000, you don’t get bit in the butt.
Of course not! I live in Saskatchewan, so I don’t pay New York sales tax on the stuff I buy from Company X in Yonkers. On the other hand, if XCo doesn’t charge me GST on the bill (and yes, foreign companies can have GST numbers too), then Canada Customs makes me pay it when the parcel crosses the border. Recently, they’ve taken to charging me PST as well, which is a little annoying but I certainly can’t complain.
If you want more complete information about GST registration, this is the place to get it.