# Do I have to collect HST on the services I sell?



## Taxsaver (Jun 7, 2009)

I'm starting a business in Ontario and would like to clarify something on collecting HST for the government. I'm going according to Canada Governement's Canada Business Network website. I have 2 questions:

1. According to the quote below I don't have to open a HST account until before I've made $30,000 in revenue. Is that correct?

"A small supplier does not have to register for a GST/HST account. To be considered as such, your business must be a sole proprietorship, partnership or corporation with $30,000 or less in total revenue in the last four consecutive calendar quarters or in any single calendar quarter."

2. May I get a refund of the taxes I pay on goods and services I purchase for my business even if I don't even collect HST on the services I sell?

http://www.canadabusiness.ca/eng/page/2651/

Thank you so much!


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## Spudd (Oct 11, 2011)

I am pretty sure the answers to your questions are :

1. Yes
2. No


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## MoneyGal (Apr 24, 2009)

I am very sure the answers to your questions are the answers provided by Spudd. 

p.s. Many small suppliers register for the HST for the reason suggested by your question 2 -- to claim the HST expenses, which they expect will be larger than the HST fees they will collect.


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## Taxsaver (Jun 7, 2009)

MoneyGal said:


> I am very sure the answers to your questions are the answers provided by Spudd.
> 
> p.s. Many small suppliers register for the HST for the reason suggested by your question 2 -- to claim the HST expenses, which they expect will be larger than the HST fees they will collect.


Thanks to both of you for your answers!


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## Taxsaver (Jun 7, 2009)

One more question, please.

1. I have a laptop I bought 3 years ago. May I include it as expenses in my 2012 tax form, or is it too late?


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## Spudd (Oct 11, 2011)

Too late I think.


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## sharbit (Apr 26, 2012)

The laptop is too late - it's also not an expense but a capital asset that will get depreciated.


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## MoneyGal (Apr 24, 2009)

For a personal asset that you are transforming to a business asset, you would (1) calculate the depreciated cost using the CCA rules, (2) calculate the percentage of use that is for business purposes (let's say it's half and half business and personal use), and then (3) include as an expense for the 2012 year the depreciated value * the business-use percentage * (1/2 the CCA rate for the year). 

Let's imagine that you bought the computer last year for $1000, and the CCA rate is 20% with a half-year rule (this means in the first year, you only depreciate at half the normal CCA rate). 

So, if those variables were all accurate for your situation, you would (1) calculate the depreciated cost: $1000-($1000*.20%) = $800; (2) calculate the business use proportion: $800 * 50% = $400; and (3) include as an expense ($400 * (1/2*20%))= $40.


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## MoneyGal (Apr 24, 2009)

X-posted. Guys, it is not too late (unless the depreciated value is already zero). Here's the relevant CRA link: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/lf-vnts/ssts/menu-eng.html


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## Cruiser (May 27, 2012)

Taxsaver said:


> 1. According to the quote below I don't have to open a HST account until before I've made $30,000 in revenue. Is that correct?


If you make more than 30k in revenue, then you will have to file an HST return. If you file an HST return, then you will be expected to charge HST as per the rules for the first 30k of revenue. A subtle difference to what you are saying...but could be costly if you wait to see if you are close to 30k. My advise, register and charge the HST.


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## balexis (Apr 4, 2009)

This article gives various scenarios and the actions required:
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/rgstrng/smllspplrclc-eng.html


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