In Ontario, there are 2 types of sales taxes you may have to collect: GST (Goods and Services Tax) and PST (Provincial Sales Tax). Most individuals or businesses engaged in a commercial activity with annual sales and revenues of $30,000 must register and charge the GST/HST. The rate is 5% since January 1, 2008.
If your gross revenue is less than $30,000, then you may voluntarily register for and charge the GST. When making this decision consider the following: • Will it be an accounting hassle? For some people, particularly those on a manual book-keeping system, accounting for GST means another 2 columns to balance. • If you don’t charge the GST, you won’t be able to take advantage of Input Tax Credit which allows you to deduct the GST you have paid on business expenses from the GST you have collected. • Not charging the GST will inform everyone that your gross sales are less than $30,000. • What are your clients used to? Do your competitors charge the GST? For more information contact: Canada Revenue Agency (CRA) Office Tel.: 1(800) 959-5525 web site: www.cra-arc.gc.ca
The RST, also known as the Provincial Sales Tax (PST), is a tax based on the retail price of most goods. The RST rate in Ontario is 8% on most purchases of goods and on labour charges to install, repair and maintain taxable goods and equipment. Further details can be found on Ontario Ministry of Revenue Web page: www.rev.gov.on.ca/
Source: Canada - Ontario Business Service Centre