Confused about charging taxes in Canada

[AshleyR]

So I registered my business a few months ago and got a GST number/business number from the Gov't. I believe every quarter I am to remit the GST I've charged and paid. I have done that for my parents business and understand the paperwork, etc. I have to do my first remittance in about 2 weeks. I haven't sold any soap yet but have spent a couple hundred dollars on GST that I've paid on supplies, etc. so I'll be getting that back (correct?)

I also have a vendors permit that I obtained at my town hall and I believe that means I need to charge PST too (???) I'm really confused about this. I didn't get any info about paperwork that needs to be filled out for the PST, or when I am supposed to remit it (if I am?) I didn't get a special PST number or anything, either. :?

Also, when someone from the US or other provinces orders my soap, are they charged GST & PST? Since PST is provincial sales tax, I'm not sure if it applies to customers ordering from other provinces, or if GST applies to international customers.

And - what if someone buys a loaf of soap from me for resale? Same with wholesale orders, etc. What tax do they pay, if any?

As you can tell, I'm pretty clueless about all of this tax stuff. I really should have looked into this earlier (since my grand opening is in 11 days!) but I've been super busy. I suppose I could call the gov't and get answers to all of these questions too, but I thought I'd ask here first.

Thanks in advance to anyone who is willing to help me with this. I appreciate it!

 

[Guest]

Here is a link for you Ashley , I am not sure it has all of the info you need but it has some of it .

http://canadabusiness.ic.gc.ca/servlet/ ... lay&c=Regs

KItn

 

[Lindy]

Hi Ashley,

Ontario may be different than Ontario but here is what I know.

In BC I had to apply for PST separate from GST. I don't pay PST on purchases but I do have to charge it UNLESS it is for resale then I only have to charge GST.

WIth the GST I would contact then and ask. SInc eyoudidn't do any sales I'm not sure how that would be handled. I didn't register for the tax numbers until the month that I was starting business so that my first quarter would have offsetting taxes on the GST. I hate audits and I was worried about getting audited.

When I sell to someone out of province then I only chrage GST.

HTH

Lindy

 

[AshleyR]

Thanks ladies!

Lindy you said you don't pay PST on purchases... do you send in your business number to the company to be exempt? I tried this with one company and they told me that most of their customers just pay it upfront, then remit it and get it back from the gov't. eventually. I wasn't sure if that's how most suppliers prefer to do it.

Also, with your website, how are you able to not charge people from other provinces PST? Does your website do that for you? I know mine doesn't - it adds the taxes automatically, same for everyone. I'm thinking I may run into problems with that....

Thanks again!

 

[Guest]

I hate audits and I was worried about getting audited.

HTH

Lindy

If you are following the rules and regs an audit is not anything to be afraid of, it can be a very helpful thing. They know how confusing it all is . We were audited a few years ago for the antiques and collectibles business. The lady who did the audit came to our home and was fantastic , she gave us all kinds of very helpful tips.

kitn

 

[Lindy]

Hi Ashlley - My suppliers are wonderful and as soon as I had my tax number they quit charging the PST. Here in BC you cannot get a PST refund which is why the suppliesr are supposed to give you an exemption. They have taken my word that I am PST registered. My on-line store allows me to set up the taxes for each province. So if someone in BC ordered they would pay the PST anyone outside of BC gets charged only GST. If I were to open it up to other countries then they would be tax exempt fro both taxes. I don't know what it's like in Ontario for PST, but my business advisor said get both of your tax numbers right away so you can take advantage of the savings. If I hadn't done that then the PST would have become part of my COGS.

Kitn - thank you _ I am always so worried about audits and stuff - I'm just a wimp....

 

[Guest]

Kitn - thank you _ I am always so worried about audits and stuff - I'm just a wimp....

You are not wimpy , until you go through it , it is a very scary thought

Kitn