| Pages in topic: < [1 2] | Registering for GST/HST as beginning free-lancer Thread poster: Margreet Mohle
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Tom Ellett (X) 
United Kingdom
Local time: 02:16
Norwegian to English
+ ...
Sarah McDowell wrote:
As far as I have heard we don't need to register for GST/HST as long as our total sales does not exceed $30,000. Even if our sales exceed this amount, we never have to charge taxes to clients in foreign countries. But if we have over $30,000 then we have to register for a GST number and charge taxes to clients in Canada? Is this correct?
Yes, that's correct. And if you have a lot of clients outside Canada, it may be to your advantage to register, because the input GST/HST that you can claim back on legitimate business expenses (IT, office supplies, phone bill, etc.) may exceed the amount of tax that you need to remit on your Canadian sales – so you end up with a nice little refund each quarter.
I was also wondering about gross and net self-employed income for tax purposes. Would the net income on Canadian income tax forms be referring to our income after expenses have been deducted?
Yes. You can deduct anything that can legitimately be considered a business expense and, if you work from home, a share of all household bills approximately equivalent to the proportion of space in your home occupied by your office. So, if you use one room out of five (not counting kitchens and bathrooms), you can deduct 20% of your hydro, heating, property tax, home insurance, condo fees, etc.
| | | | Sarah McDowell
Canada
Local time: 20:16
Member (2012)
Russian to English
+ ...
| Thank you both | Feb 26, 2014 |
Thank you for your replies. Yes, most of my clients are outside of Canada. So how exactly does this work? Do we get to claim back the GST on our business expenses on a quarterly basis?
John, I'm not quite sure what you mean by sales tax return. I am filing an income tax return. Is the sales tax return something that must also be filed with our income tax? I have never filed it.
Best regards,
Sarah
| | | | Tom Ellett (X)
United Kingdom
Local time: 02:16
Norwegian to English
+ ...
| Separate from income tax | Feb 26, 2014 |
When you register for GST/HST, you can choose whether to file your return quarterly or annually. If you're likely to be getting refunds, quarterly is the better option – why wait till year-end to get the tax back if you don't have to?
I simply called the Canada Revenue Agency to register, but it looks like you can also do so online, ... See more When you register for GST/HST, you can choose whether to file your return quarterly or annually. If you're likely to be getting refunds, quarterly is the better option – why wait till year-end to get the tax back if you don't have to?
I simply called the Canada Revenue Agency to register, but it looks like you can also do so online, starting here:
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/bn-ne/bro-ide/menu-eng.html
The GST/HST return is totally separate from your income tax return. It's a very simple online form, and basically all you need to fill in is (a) your total revenue for the period, (b) the amount of GST/HST collected, and (c) the amount of input tax paid on qualifying expenses. The online form then subtracts (c) from (b). If the result is positive, you have to remit that amount. If it's negative, you will receive that amount as a refund.
Once you are registered, the CRA will mail you a quarterly (or annual) notice containing a login code to access the online return form for the period. ▲ Collapse
| | | | Sarah McDowell
Canada
Local time: 20:16
Member (2012)
Russian to English
+ ...
| One more question | Feb 28, 2014 |
Thank you Tom and John. I have one more brief question.
I am doing my income tax and I see both "professional income (category 137)" and "business income" (category 135) as possible categories for self-employment income.
Do you know if translations are classified as business or professional income?
Also, in addition to all our office supplies I assume that things like software, additional training courses, webinars, etc. can all be counted as business expe... See more Thank you Tom and John. I have one more brief question.
I am doing my income tax and I see both "professional income (category 137)" and "business income" (category 135) as possible categories for self-employment income.
Do you know if translations are classified as business or professional income?
Also, in addition to all our office supplies I assume that things like software, additional training courses, webinars, etc. can all be counted as business expenses? Is this correct?
I would really appreciate the advice of any translators in Canada.
Thanks again,
Sarah ▲ Collapse
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Tom Ellett (X)
United Kingdom
Local time: 02:16
Norwegian to English
+ ...
| Makes no difference | Mar 4, 2014 |
I don't think it matters whether you enter your revenue under "business income" or "professional income." I'm pretty sure I have used both categories on different occasions in the past. It doesn't affect your tax assessment.
Yes, software and training (online or in person) can certainly be counted as business expenses.
Good luck with the tax return!
| | | | anglomontrea (X)
Canada
Local time: 21:16
| Tax rates used by Ontario-based translators for clients in Quebec | Apr 1, 2014 |
Hi all,
I’d like to add to this very informative discussion thread by asking a basic question (sorry if it’s been answered elsewhere):
If a translator is based in Ontario (I’m in Ottawa) but his/her clients are in Quebec, which tax rate does the translator use to charge the clients? (I ask because I’m finally rising above the $30,000 threshold for annual income)
(1) GST only (5%);
(2) HST (which is 13% in Ontario); or
(3) GST and Quebec�... See more Hi all,
I’d like to add to this very informative discussion thread by asking a basic question (sorry if it’s been answered elsewhere):
If a translator is based in Ontario (I’m in Ottawa) but his/her clients are in Quebec, which tax rate does the translator use to charge the clients? (I ask because I’m finally rising above the $30,000 threshold for annual income)
(1) GST only (5%);
(2) HST (which is 13% in Ontario); or
(3) GST and Quebec’s sales tax, the QST (5% + 9.75% = 14.975%)
This info seems rather hard to find, surprisingly. According to this site (http://www.canadabusiness.ca/eng/page/2651/#toc-_charging_sales_tax_to_out-of-province_territory_customers), QST should be charged only if you operate in the province; if you’re outside Quebec, you apparently don’t need to charge it.
Any info would be greatly appreciated! Thanks,
anglomontrealer ▲ Collapse
| | | | Tom Ellett (X)
United Kingdom
Local time: 02:16
Norwegian to English
+ ...
Under the place of supply rules, the client's location governs the rate of GST/HST. So, for clients in provinces that have harmonized their sales tax with the federal GST, you charge HST at the appropriate rate (13% for ON, 15% for NS, etc.). For clients in all other provinces, including Quebec, you charge only the 5% federal GST.
I explained the rules in more detail in an article for the ATIO newsletter, which you can downloa... See more Under the place of supply rules, the client's location governs the rate of GST/HST. So, for clients in provinces that have harmonized their sales tax with the federal GST, you charge HST at the appropriate rate (13% for ON, 15% for NS, etc.). For clients in all other provinces, including Quebec, you charge only the 5% federal GST.
I explained the rules in more detail in an article for the ATIO newsletter, which you can download here:
http://atio.on.ca/informatio/issues/volume41.2.pdf
The article is on p. 7 in English and p. 15 in French. ▲ Collapse
| | | | anglomontrea (X)
Canada
Local time: 21:16
Hello Tom,
Thank you very much! I appreciate the information, and I'll have a look at your article right away.
Thanks again,
anglomontrealer
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anglomontrea (X)
Canada
Local time: 21:16
| On the provincial tax side of things | Apr 16, 2014 |
Thanks again for your information, Tom; it was very helpful. Everything seems pretty clear on the GST/HST side of things.
However, I’m wondering if provincial tax should be charged somewhere along the way:
1) As an Ontario-based translator (I’m in Ottawa), I charge Ontario-based clients HST (13%);
2) If I were based in Quebec, I would charge Quebec-based clients both GST and QST (14.975% altogethe... See more Thanks again for your information, Tom; it was very helpful. Everything seems pretty clear on the GST/HST side of things.
However, I’m wondering if provincial tax should be charged somewhere along the way:
1) As an Ontario-based translator (I’m in Ottawa), I charge Ontario-based clients HST (13%);
2) If I were based in Quebec, I would charge Quebec-based clients both GST and QST (14.975% altogether);
3) However, as an Ontario-based translator working for Quebec-based clients, I charge only GST (5%) – it seems that something is missing?
If anyone has any insight into this, it would be greatly appreciated – thank you! ▲ Collapse
| | | | Tom Ellett (X)
United Kingdom
Local time: 02:16
Norwegian to English
+ ...
| No provincial tax outside Quebec | Apr 30, 2014 |
As far as I know, Quebec is the only province where the provincial sales tax applies to translation services, and then only for Quebec-based suppliers serving Quebec-based customers. Suppliers based outside of Quebec do not have to charge QST on sales to customers in Quebec.
To quote a federal government business advice website:
You must register to collect and remit the Quebec sales tax (QST) only when you have operation in the province (such as production ... See more As far as I know, Quebec is the only province where the provincial sales tax applies to translation services, and then only for Quebec-based suppliers serving Quebec-based customers. Suppliers based outside of Quebec do not have to charge QST on sales to customers in Quebec.
To quote a federal government business advice website:
You must register to collect and remit the Quebec sales tax (QST) only when you have operation in the province (such as production or marketing activities), when you hire an employee and/or when you have an address in Quebec. Otherwise, you are not obligated to collect QST on behalf of the province if you sell taxable goods and services to residents of Quebec.
Source: http://www.canadabusiness.ca/eng/page/2651/#toc-_charging_sales_tax_to_out-of-province_territory_customers ▲ Collapse
| | | | anglomontrea (X)
Canada
Local time: 21:16
Hello Tom,
Thanks again for your help -- much appreciated!
| | | | Fang Liang
Canada
Local time: 21:16
Member (2014)
English to Chinese
| new on board | Jul 10, 2014 |
I am also a new freelancer in Ontario, Canada.
Thanks for sharing.
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