ii) Goods and Services Tax (GST) and Harmonized Sales Tax (HST)
Most goods and services sold or provided in Canada are taxable at the rate of 5% (GST) or 13% (HST). The HST applies in the provinces of New Brunswick, Nova Scotia and Newfoundland, British Columbia and Ontario. All businesses with annual GST taxable revenue of $30,000 or more must register for GST with the Canada Revenue Agency. Firms with less than $30,000 annual revenue may opt to not collect the GST/HST but should contact the Canada Revenue Agency for details. Businesses must register to obtain a Business Number with a GST/HST account. There is no fee to register for a GST number. To register in person, visit:
Business Window, Canada Customs and Revenue Agency
5800 Hurontario Street
Mississauga, ON L5R 4B4
iii) Employers Health Tax
All employers are required to pay the Employers Health Tax. The first $500,000 of the payroll is exempt. The Employers Health Tax on self-employed income has been eliminated. For more information contact:
Mississauga Regional Tax Office
77 City Centre Drive, 1st floor
Telephone: (905) 273-9490
Fax: (905) 949-3388
iv) Corporation Taxes
Ontario Corporations Tax Number The Ontario Corporations Tax Number is assigned when a corporation has incorporated with the Ministry of Consumer and Business Services (MCBS). This number is required for filing your combined CT23 Corporations Tax and Annual Return. Once registered with MCBS you may obtain your Ontario Corporations Tax number generally 14 days after registration with MCBS by calling in Toront 416-920-9048 or 1-800-263-7965.
Business Number (BN) The Federal Business Number (BN) is issued by the Canada Revenue Agency (CRA). This number is required for filing your federal tax return as well as your combined CT23 Corporations Tax and Annual Return.
v) Taxes for sole proprietorships and partnerships
You report your business and professional income on your individual tax return.
The fiscal period for most new businesses is the calendar year. Your fiscal period can be less than 12 months in some instances, but it cannot be more than 12 months. Business expenses are costs related to your business activities. You can usually deduct any reasonable expense related to your business activities. But remember that you can ONLY deduct business expenses. You cannot deduct personal expenses.
For further information it is recommend that clients read the CRA publication "Business and Professional Income" or contact the Business Window of CRA for further information.
The Canada Revenue Agency (CRA) offers a number of FREE videos and recorded webinars that present information about CRA programs and initiatives, including HST, Payroll and keeping proper tax dcoumentation. For more information visit their website at: http://www.cra-arc.gc.ca/vdgllry/bsnss/menu-eng.html
Software for taxation and accounting targeted at small business is available from a number of local retailers. Please ask MBEC staff for information.