GST/HST is a consumption tax. HST is collected in provinces
where the Federal sales tax and provincial sales tax (PST) have
been combined into a single value added sales tax. The provinces
which currently collect HST are New Brunswick, Newfoundland and
Labrador, Nova Scotia, Ontario, and Prince Edward Island, while the
other Canadian provinces collect GST and PST separately, except
Alberta which collects only GST and does not charge or collect PST.
GST/HST is levied under the Excise Tax Act and generally applies to
all taxable supplies, which is the provision (sale) of property or
services in any manner whatever that is made in the course of a
commercial transaction, subject to some exceptions such as
zero-rated and exempt supplies.
Essentially, whenever a good or service is provided
commercially, GST/HST will generally apply. While it is the person
who purchased the taxable supply that owes the GST/HST to the
Canada Revenue Agency, the supplier is the one required to collect
and remit the tax. Every person who makes a taxable supply in the
course of a commercial activity in Canada is required to be
registered unless exempted as set out below. Where a person is a
GST/HST registrant, that person will need to collect GST/HST and
remit it, effectively increasing the prices/cost of their supplies
to the ultimate consumer.
There are 3 exceptions that allow a person not to be registered:
1) where the supplier is a small supplier; 2) where the only
commercial activity is the making of supplies of real property by
way of sale otherwise than in the course of a business; 3) where
the person is a non-resident person who does not carry on business
in Canada. Consult with one of our experienced Toronto tax lawyers
and determine if you are meeting your obligations regarding GST/HST
Exemptions for GST/HST Registration
The first GST/HST registration exemption is for small suppliers.
A small supplier has the advantage of being exempt from registering
for a GST/HST number and can carry out their commercial activity
without collecting and remitting GST/HST. In order to qualify as a
small supplier, a person must have revenues below $30,000 in the
previous four calendar quarters. Where a person is a public service
body, the person must have revenues below $50,000 in the previous
four calendar quarters to qualify as a small supplier.
Additionally, regardless of how much revenues were earned in the
previous four calendar quarters, if in the current calendar
quarter, the person earns revenues of $30,000 or greater, or
$50,000 or greater in the case of a public service body, then that
person will no longer qualify as a small supplier and will be
required to become a GST/HST registrant.
The second GST/HST registration exemption applies where a person
sells or transfers real property not in the course of a business.
Basically, if a person who is not in the real estate business sells
real estate, they are exempt from registering for GST/HST
The third GST/HST registration exemption applies to persons who
might carry out a taxable service or transfer goods in Canada, but
is a not a resident of Canada and does not carry on their business
in Canada and therefore does not need to register for GST/HST
purposes..However the 2017 Federal Budget has introduced new rules
requiring that ride sharing or ride hailing services like Uber and
Lyft will need to collect and remit GST/HST on fares even if they
don't meet the regular $30,000 threshold and would otherwise
qualify as a small supplier. This will bring these services more in
line with taxi services which are already required to collect and
remit GST/HST. Call our top Toronto tax lawyer firm if you have any
questions about GST/HST Registration or about the 2017 Federal
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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