Sales tax is the filing most businesses get wrong first, because the rules change with where your customer is rather than where you are. We register you where you need to be registered, file on your cycle, and make sure the input tax credits you are entitled to actually get claimed.
What this includes
- Registration, including working out when you were required to register
- Returns on your filing cycle, monthly, quarterly or annually
- Input tax credits reviewed properly rather than estimated
- Businesses selling into more than one province, and the rates that apply to each
- Overdue returns brought up to date
- Answering CRA sales tax reviews and audits
Selling into more than one province
The rate that applies is generally the rate where the customer is, not where you are. A business in Ontario selling to Alberta, British Columbia or Quebec is dealing with three different answers, and provincial sales taxes sit on top of that in some provinces. This is the single most common place a growing business builds up a liability without noticing.
The reconciliation nobody does
The HST control account in your books and what you have actually filed and paid should agree. They often do not, and the difference is usually discovered years later during a review. We reconcile it as part of the year end — see bookkeeping.
Behind on filings
Unfiled sales tax returns are worse than unfiled income tax returns, because the money was collected from someone else. We file what is outstanding, work out the real position and deal with the CRA on penalties and interest.
Questions we are asked about this
When do I have to register for GST or HST?
Generally once your taxable revenues pass the small supplier threshold over four consecutive calendar quarters, though some businesses have to register from the first dollar. Registration can also be worth doing voluntarily before you are required to, because it lets you claim input tax credits on what you buy.
Which province's rate do I charge?
In most cases the rate is based on where the customer receives the goods or services, not where your business is. Selling across provinces means charging more than one rate, and keeping the records that show why each one applied.
Can you fix HST returns that were filed wrong?
Yes. Returns can be adjusted, and input tax credits that were missed can often still be claimed within the time limits. We work out the correct position first and then deal with the CRA.
Worth reading
Where we work
We are based in Scarborough and act for clients across Toronto and the GTA in person — see accountant in Scarborough and small business accountant in Toronto — and everywhere else in Canada by email and video call.
Our other services
Corporate Tax Returns (T2) · Personal Tax Returns (T1) · Trust Returns (T3) · Bookkeeping · Payroll · CRA Audits and Disputes · Financial Statements · Tax Planning · Incorporation and Business Setup · Estate and Succession Planning · Cross-Border Tax
Our office
ClearWealth Accounting Advisors
1457 McCowan Rd, Suite 202
Toronto, Ontario M1S 5K7
Get directions
Open Monday to Friday, 9 a.m. to 6 p.m.
Phone: (437) 290-5117
Email: info@clearwealth.tax
