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 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 purposes.
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 Budget.
Nathaniel completed his Juris Doctor degree at Osgoode Hall Law School where he excelled in the areas of tax law and legal writing and research.He successfully completed all of the requirements of Osgoode’s Taxation Law Curricular Stream
Carson Pillar articled with us and then joined our tax law firm as an associate Canadian tax lawyer having been called to the Ontario bar in June 2016. Carson runs our Calgary tax office. Carson earned his Juris Doctor from Western University and graduated in 2015.
Ian Thomas joined our Toronto tax law firm as an articling student (student at law) in July 2016 and upon becoming a Canadian tax lawyer in June 2017 he becomes our latest tax associate. Ian earned his Juris Doctor from Osgoode Hall Law School and graduated in 2016.
Tigra Bailey has now joined our tax law firm as a summer tax law student and is expected to return as an Articling Student in 2017-2018. Tigra is completing her Juris Doctor at Queen’s University and her expected graduation date is in 2017.
Ildi has joined the law firm of Rotfleisch & Samulovitch PC in June, 2000 and brings over 25 years of legal secretarial experience to the firm. She started as a Legal Secretary and after obtaining Certificates from The Institute of Law Clerks of Ontario
Jamin Chen joins our tax law firm as an articling student in September 2016 after earning his Juris Doctor from Allard Hall at the University of British Columbia.