Tax
Accurate Bookkeeping Simplifies Tax Filing
Businesses Selling in Canada
Based on the destination of product & service delivery along with a few other eligibility criteria -> you can be required to register with a total of 5 tax agencies in Canada.
First and foremost is the Federal GST/HST which covers 6 provinces and all 3 territories.
(refer to the orange & green colored regions in TABLE CAN 1.0)
- A business entity needs a single GST/HST registration with Canada Revenue Agency (CRA) to sell in all these 9 regions.
- Orange-colored regions charge only 5% GST.
- Green-colored regions charge 15% HST (Harmonized Sales Tax) except for Ontario which charges 13% HST.
Additionally, you may require to register with 4 more provincial tax agencies
(refer to the blue-colored regions in TABLE CAN 1.0)
- British Columbia - 7% Provincial Sales Tax (PST)
- Manitoba - 7% Retail Sales Tax (RST)
- Saskatchewan - 6% Provincial Sales Tax (PST)
- Quebec - 9.975% Quebec Sales Tax (QST)
What you get from Transcounts
- We at Transcounts can help to keep track of when and in which provinces your business is required to register.
- Complete the registration process on your behalf.
- Help you automate -> charge, collect, reconcile, submit and remit the correct amount of sales tax.
- Save you accurate and maximum input tax credits (ITC). We have saved thousands of dollars in GST/HST refunds to our existing clients.
- Most importantly guide you throughout the process and give your business confidence to navigate this complex compliance.
Businesses Selling in the USA
NEXUS – that’s the term you must familiarize yourself with if your business is planning to sell in the USA market. Here are the two most common ways businesses create NEXUS/Connection(s) with States.
1. Physical Nexus
if you are just starting to sell in the USA then establishing the physical Nexus would be the first step (based on the location of people and properties).
2. Economic Nexus
if you have already been selling across the USA then also keep track of economic Nexus (based on sales transactions and/or dollar value thresholds).
Two most common points to understand when you pass the economic nexus thresholds.
- Product Taxability - is your product taxable or NON-taxable in a state where you meet all the economic nexus eligibility criteria? If the product is non-taxable you do not need to register and collect sales tax.
- Marketplace Tax Collection (MTC) Rule - if you are only selling on marketplaces for example Amazon then the marketplace itself will be collecting and remitting on your behalf. You do not need to register and collect sales tax.
Physical Nexus - Based on location People & Property.
- Employees (irrespective of full-time or part-time, remote or onsite).
- Business owners (irrespective of active or not actively involved in business).
- Property, Vehicle, Kiosk and even attending Trade Shows (irrespective of owned, rented, or leased).
- Inventory Warehouse (irrespective of owned, rented, or leased).
Economic Nexus - All about your Sales usually in the past 12 months.
- The threshold for the dollar value of sales (e.g. when you pass $100K sales dollar value in Wyoming in the past 12 months)
- The threshold for the number of sales transactions (e.g. when you pass 200 sales orders/invoices in Wyoming in the past 12 months)
- Combination of sales transactions and dollar value.
Note: These are mostly common sales tax regulations applied to general businesses. it may not be a complete guide for your unique business situation; therefore, it’s recommended to consult a tax professional to establish nexus for your business.
What you get from Transcounts
- We at Transcounts can help to keep track of when and which states your business is required to register in.
- Complete the registration process on your behalf.
- Help you automate -> charge, collect, reconcile, submit and remit correct amount of sales tax.
- We’ve partnered with Taxjar & Avalara to automate the entire process.
- Most importantly guide you throughout the process and give your business confidence to navigate this complex compliance.
Our Partners
We work with audit-enabled cloud-based tools to create highly productive and seamless workflows to simplify day to day accounting activities.
What you get from Transcounts
We at Transcounts are hyper-focused on delivering excellent bookkeeping, payroll, accounts payable & receivable, and Fractional CFO services and for that reason we do NOT file income tax returns. However, we have partnered with tax expert CPAs across the USA and Canada to file your corporate income tax return. We are happy to do the introduction with our network CPAs or even get your business income tax return filed on your behalf.
Can I file with my own CPA?
Absolutely, the decision is yours. You can opt to proceed with your existing tax professional, or collaborate with our partner firms. Regardless of your choice, we’ll send your year-end financials, reconciliations and address any queries they may have directly. You have the flexibility to receive the year-end package and forward it to your chosen CPA or tax professional – it’s entirely up to your preference and convenience.
Note: Access to our tax partner network and their discounted rates are exclusively accessible to Transcounts clients.
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