gst
Definition
GST is a federal tax that businesses collect from customers on most goods and services they sell, then send that collected money to the government. Once your business earns over $30,000 in revenue in a single calendar quarter or over four consecutive quarters, you must register for a GST account with the CRA and start charging your customers this tax. The current GST rate in Canada is 5% on top of the sale price.
Example
If you sell a $100 product to a customer, you charge them $105 and then remit that $5 to the CRA when you file your GST return.
Watch Out
Missing the $30,000 threshold and failing to register on time can result in penalties and owing back-taxes on sales you already made without collecting GST from customers.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.