If you do business in many parts of Canada, you must remit goods and services tax or harmonized sales tax to the federal government. However, if you do business in British Columbia, Manitoba, Saskatchewan or Quebec, you must collect federal GST and provincial sales tax, and you have to send in these payments separately.
The Small Supplier Rule
If you qualify as a small supplier, you do not have to register for an GST/HST account. As of 2016, a small supplier is a business owner who collects less than $30,000 in revenue each year. Note this figure refers to revenue and not profits.
However, most provinces do not use the small supplier rule. As a result, if you sell taxable goods or services in a province with PST, you have to collect and remit PST regardless of your volume of sales. If you fall into the small supplier category, you may be able to assess and remit PST without worrying about GST. Once you pass the $30,000 threshold, you have to juggle both payments, and the rules may vary based on where you do business.
In British Columbia, you may register for a PST account online using eTaxBC, or you may complete Form FIN 418 (Application for Registration for Provincial Sales Tax) and mail it to the Ministry of Finance.
Once registered, you must collect 7 percent PST on all applicable sales, and you are required to report monthly, quarterly or semi-annually based on the volume of PST collected. You may report and remit taxes through the online service or using Form FIN 400 (Provincial Sales Tax Return).
In Manitoba, PST is referred to as retail sales tax, and it is 8 percent of each sale. To register, complete Form MBT-RL1, Application for Registration / Dealer’s License, and mail it to the Minister of Finance. Alternatively, you may register for an account online using TAXcess. Remit Manitoba’s RST online or through the mail.
If you sell goods or services in Saskatchewan, you must have a vendors licence. To register, you may use the online Corporate Registry, or you may fill out an application form and send it to the Government of Saskatchewan. Once registered, you must charge 5 percent PST.
If you collect more than $7,200 in PST per year, you have to remit sales tax monthly. If you collect between $3,600 and $7,200, you may remit quarterly; if you collect less than $3,600, you may remit annually. The provincial government sends you a reminder, and you must send in your payment 20 days after the end of the filing period.
In Quebec, PST is called Quebec sales tax, and Revenu Québec collects the QST payments. Quebec is the only province to use the small supplier rule; as a result, you don’t have to register for a QST account until you pass the small supplier threshold. At that point, you may register for an account and start charging QST. Remit your QST return every reporting period, even if you don’t owe any QST.