Important! Know Your Sales TAx Regulations ~ We Will Ensure you Are Compliant ~

Canada and BC have some complex regulations surrounding sales tax and tax compliance. When does PST and/or GST apply and when does it not? What products or services are exempt from PST but not GST? What products or services are exempt from both PST and GST? What products are subject to additional PST (such as liquor)? Not only will you need to be familiar with tax regulations related to your business and your products, but also with the taxation rules on your purchases/expenses. All of the sales taxes collected and sales taxes paid must be properly tracked for your mandated tax filings.

The most important thing is that you collect the taxes that you are required to collect, that they are all accurately tracked and remitted on time. We can look after all of your sales tax tracking and filing needs on your behalf to ensure you are always in compliance with legislation.

As consumers, we're all far too familiar with paying GST on just about every product or service we pay for, and that's because GST is a mandatory Federal sales tax that most (nearly all) providers of products or services must collect from their customers. The one exception is for "small suppliers" that do not earn more than $30,000 in gross income (before expenses) in four consecutive calendar quarters (i.e. a "running" year). 

GST is not an expense, but is money that belongs to the government the moment you receive payment. However, you don't need to remit all of the GST you collected during the course of your business activities as you can deduct your input tax credits (the GST you paid on your purchases during the course of your business activities). The remittance amount will be the net difference. (GST collected $) - (GST paid ITC $) = (GST remittance $). 

It is your responsibility to understand when to register for, and start charging GST in your business, as dictated by the CRA. Once you are registered and have a GST number, you will need to know what products and services are taxable, collect GST from your customers, and file your GST returns (frequency determined by CRA based on annual revenue), and most importantly submit your GST remittance to the government on time. When we're looking after your GST returns or all of your bookkeeping, we will ensure you are compliant with the GST requirements.

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BC's Provincial Sales Tax is a retail tax that applies to purchases or leases of new AND used goods and services (unless exempt) in BC, brought into BC, or delivered to BC. Many businesses do not realize that you are responsible for self-assessing and reporting PST if you did not pay it at the time of sale. When might this happen? You buy a much-needed piece of equipment in a private sale from a non-GST Registrant, you order some of your main business supplies from a vendor outside of Canada and are not charged PST by the vendor, or you drive to Alberta to pick up equipment that you need urgently and they could not promise delivery in time, are all examples of when you are required to report and remit the PST at the prescribed rate.

Speaking of prescribed rates, the general rate for PST in BC is 7%, but there are some products or services that are exempt from PST, while other items have higher rates (such as 10% on liquor, 12% on some vehicles, boats and aircraft, 8% on accommodation, etc.). It is important to know what PST rates you are required to charge on your business's products or services, what is exempt, and when/how to file and remit. When we're looking after your PST returns or all of your bookkeeping, we will ensure you are compliant with the PST requirements.

Small Business Guide to PST

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