What is GST?
– GST stands for Goods and Services Tax, a federal tax applied to most goods and services in Canada. It was introduced in 1991 and is currently levied at a rate of 5%.
GST and HST (Harmonized Sales Tax)
– In some provinces, GST is combined with the Provincial Sales Tax (PST) to form the **Harmonized Sales Tax (HST)**. HST rates vary by province:
– Ontario: 13%
– New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island: 15%
– Other provinces like British Columbia, Manitoba, and Saskatchewan maintain separate GST and PST, where GST remains at 5%.
Navigating GST/HST Credit in Canada: Eligibility and Benefits
-GST/HST Credit: This is a tax-free quarterly payment to help offset the GST or HST tax you pay. Eligibility depends on:
– Being a Canadian resident for income tax purposes.
– Having a low or modest net family income.
– Age (19 years or older).
-For Immigrants:
– You can apply for the GST/HST credit without filing your first tax return. Use **Form RC151** for individuals without children or **Form RC66** if you have children. These forms are essential for newcomers to apply for benefits immediately upon arriving in Canada.
Filing and Registration
–Businesses: If you’re starting a business in Canada, you need to register for GST/HST if your taxable supplies exceed CAD 30,000 in any single quarter. Registration involves obtaining a Business Number (BN) through the Business Registration Online (BRO) service.
–Non-Residents: Even if you’re not physically in Canada, if you supply taxable goods or services to Canadian consumers or if you’re involved in certain activities like hosting events where more than a quarter of attendees are Canadian, you might need to register for GST.
Taxable vs. Zero-Rated vs. Exempt
-Taxable Supplies: Most goods and services are taxable under GST/HST.
-Zero-Rated Supplies: These are taxable at 0% (e.g., basic groceries, prescription medications). Businesses can claim Input Tax Credits (ITCs) for GST/HST paid on inputs for these supplies.
-Exempt Supplies: These do not carry GST/HST (e.g., most health, education services). Businesses cannot claim ITCs for inputs related to exempt supplies. Navigating GST/HST Credit
Filing Returns
GST/HST Returns: Businesses must file returns periodically. The frequency depends on annual turnover:
– Monthly if annual taxable supplies exceed CAD 6 million.
– Quarterly if between CAD 1.5 million and CAD 6 million.
– Annually for smaller businesses.
– **Digital Businesses**: Non-resident digital businesses with revenues over CAD 30,000 in a 12-month period must register and file returns as well.
Additional Considerations for Immigrants
– **Newcomers’ Benefits**: Besides GST/HST credit, look into other financial benefits like the Canada Child Benefit (CCB) if you have children, and the Climate Action Incentive Payment (CAIP) for offsetting carbon pricing costs.
– **Residency**: Your tax obligations begin from the day you establish significant residential ties in Canada, which typically aligns with your arrival date.
Understanding these aspects of GST in Canada will help you navigate your financial responsibilities and benefits as an immigrant. For detailed guidance or specific situations, consulting with a tax professional or using resources from the Canada Revenue Agency (CRA) is advisable. If you need further clarification or have questions about specific scenarios, feel free to ask. Navigating GST/HST Credit