Here we will go through the importance of proper documentation, provide some information on which rate you should be charging your clients and customers and let you know the different options you have when filing your GST return and when to file.
Keeping accurate records is very important when filing and paying GST. If you are claiming Input Tax Credits (ITCs) you will need to make sure you track all of your business purchases, if you are using accounting software it is quite simple to set this up.
It is a good idea to scan all documents and file the originals somewhere safe. We recommend using LedgerDocs, a great document management tool designed by the team here at LedgersOnline.
Once you've posted all your ITCs and all the GST collected is captured you can then calculate your return. The total amount you will need to pay will be the total GST that was collected less the amount of ITCs for the period. If the total ITCs is more than what you collected than you get a refund!
Now, how to know which rate to charge your customers and clients. If you are selling or providing goods or services within your own province the rate you will charge is fairly straight forward, you can refer to the below chart to give you the rate you should use (please note you should still check the CRA website to make sure your services or supplies are not zero rated):
If you are selling services or goods across the country things get a little more complicated. The rate you will charge depends on a few things: the type of supply, where the supply was made and who the supply is made to. There is a comprehensive list on the CRA's website of what supplies require GST to be charged, and which are zero rated. You need to take all of these factors into consideration before you choose the rate for each transaction. You can find more information on the CRA's website to narrow down your specific supply or service:
You now know what rate to charge, let's talk about filing your return. There are three ways to file your GST return:
- In person at a participating financial institution
- By mail to the address on the return
Let's talk about the first option as it is the quickest and most efficient way to file your GST.
You are required to file online if you are not a charity and have more than 1.5 million in annual taxable supplies. If you are a builder you will want to check the CRA website as there are some conditions that may require you to file online as well.
If you prefer to file in person you can do so at participating financial institutions. You will need the original GST remittance form that you received in the mail – they cannot process your payment without this form as the bank needs the bar code that is on the bottom of the return.
The due date of your GST return will be determined by your reporting period. The due date of the filing and the payment will always be shown on your return. If you are a monthly filer your return is due one month after the reporting period. Quarterly filers need to remit and pay one month after the reporting period and for annual filers it isn't quite as straight forward. If you have a December 31 year-end your filing deadline on June 15, but your payment is due April 30, for all other year-ends the filing and payment deadline is three months after the fiscal year-end. If you want more detailed information, you can view the CRA website.
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