Taxes: Knowing What's Required for Your Start-Up

Know Which Taxes You Need to Collect

Even the newest, smallest, and home-based businesses have tax obligations. Here you'll find the basic guidelines to ensure you collect and remit the required taxes for your business.

Provincial Tax Requirements

You may need to charge provincial sales tax (PST) if you sell taxable products or services. In general, if you'll be selling taxable goods, you must register for a PST account with the Ministry of Provincial Revenue, Consumer Taxation Branch.

To determine whether you need to charge PST, and how to register for a PST account, please refer to the provincial sales tax (PST) page on the Ministry of Finance website. The industry-specific information section provides detailed information regarding taxable products and services for each industry.

If your industry is not listed, it does not necessarily mean you’re exempt from PST. For further assistance, contact the Consumer Taxation Branch.

Federal Tax Requirements

If you’ll be charging the goods and services tax (GST), hiring employees, incorporating, or importing or exporting, you’ll need to register for a business number with Canada Revenue Agency (CRA). For more information regarding the different accounts and how to register, please refer to the CRA website.

The Benefits of GST Registration

Registering for a GST account is optional if your gross annual business revenue is not expected to exceed $30,000. However, registering can provide benefits, including:

• Tax reduction. If you buy goods and service for your business and you have a GST account, you can apply the GST you paid against the GST you collected, effectively generating a refund.
• Peace of mind. It’s easy to get caught up in busy day-to-day operations and forget to register for a GST number. If you think you might be close to the mandatory threshold, consider registering right away. Otherwise, when you reach the mandatory limit, your business will be required to pay the GST out of pocket because you cannot charge your clients retroactively.  
• Pricing strategy. If you have regular, repeat clients and you think your business revenue will reach the mandatory threshold, consider collecting GST from the outset. Otherwise, your clients might protest when their prices go up by the amount of the GST, and ask that you lower your prices to absorb the cost.

Harmonized Sales Tax (HST)

To assist your business with the Harmonized Sales Tax, the Certified General Accountants Association of British Columbia (CGA-BC) has published an HST brochure on the new tax.