Are you unsure of whether or not your business should register for PST or GST? This is a question that we hear almost daily, and is something that can be easily overlooked by small business owners throughout British Columbia.
This is why we have accumulated some important information for BC business owners that will provide you with an insight into whether your business needs to register for these taxes, and if so, the essential steps that you need to take to register, as well as some resources to help guide you through the process.
Should my business register for PST?
BC businesses operating in a commercial space while also selling taxable goods or providing taxable services, should register for Provincial Sales Tax. Regardless of annual revenues, these businesses must register to collect PST on the sale or lease of any taxable services, software, or goods in the ordinary course of business in BC.
With that said, small sellers operating home-based businesses can be exempt from this rule. A small seller must register for PST only if their revenues exceed $10,000 annually. See below for more exemptions.
Products such as food for human consumption, books, newspapers, children-sized clothing, bicycles, and prescription medications are exemptions available to all purchasers. There are also a number of other exemptions for goods and services that pertain to specific purchasers. For more information, see the BC Government’s list of tax exemptions:
How to Register for PST:
Registering online is generally the quickest way to register, and in most cases, you can receive your PST number the next business day. With that said, you can also register in person, or by mail/fax. To register online, or to find more information on the registration process, view the BC Government’s website. Make sure to read the “Before You Start” section before beginning the process.
How to Complete a PST Return:
If you have registered online using the eTaxBC online system, you can file your PST returns and pay taxes online. If you have not signed up online, you will receive a paper PST return by mail at the end of each reporting month. Your completed PST return and payment must be received on or before the last day of the month following the end of the reporting period. For more information, see this step-by-step guide to completing the PST return.
How to Report and Pay PST:
Now that you have registered and received your PST number, you can now pay the tax you have collected on your sales and the PST you owe on the purchases that have allowed for you to run your business. There are four ways to do this: Online using eTaxBC, through your bank, at a government office, or via mail or courier.
Should my business register for GST / HST?
Your business is required to register for a GST account if your gross annual revenue exceeds $30,000 per year. There are also a number of other factors that influence whether or not your business needs to pay the full extent of the GST tax. For example, does your business only provide exempt goods and services? To learn more about whether or not your business should apply for a GST account, take the Canada Revenue Agency’s questionnaire.
As mentioned above, there are a number of taxable, zero-rated, and exempt products and services that you should be aware of. For a full list of GST exemptions, and how they influence specific rates, read the CRA’s list of GST Exemptions:
How to Register for GST:
At this point, you should have an idea of whether or not you need to register for a GST number. If so, make sure you read through the GST Registration Checklist provided by the CRA. This will ensure that you have information such as your corporate name, certificate number, date of incorporation, and other important information ready for when you begin the process. Once you have all of the necessary information, it is time to register your business.
The CRA has made registering your business as simple as possible, and allows for you to register for Corporation Income Tax, GST/HST, Payroll, and Import/Export, all in one place. When you are ready, you can register here.
Filing your GST Return and Remitting any Amount Owing:
It is obvious that the process of filing your GST and remitting your amount owing is gradually going online, and depending on your financial situation, you may be required to file your return online. With that said, some registrants are eligible to file their returns via internet, at your financial institution, via telephone, mail, or in person. To see what works best for your business, see the Canadian Revenue Agency’s guide to filing your GST return and remitting any amount owing.
Starting a business can be a daunting process, and although this is one of many tasks, it is important to ensure that all of your tax requirements are completed properly. For many small businesses in British Columbia, registering for PST and GST is a necessary task that must be completed. With that said, the guide above can help business owners through the registration process and will provide you with the necessary information to get your business started on the right foot. Feel free to get in touch with our friendly accounting team if you need any help!
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