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GST - Tips & Traps


  • The GST rate is 5% as of January 1, 2008
  • Anyone involved in a commercial activity with $30000 or more of sales in the last 4 quarters must be registered for GST
  • If you are under $30000 of sales you may optionally register!
  • Any registered individual or business must charge GST on taxable items.
  • Most farm sales do not attract GST (zero rated), however be aware that there are some sales that you must collect GST for such as: canary seed, horses, custom work sales, cash rent on farmland, certain types of equipment which could have a non agricultural use, and vehicles used in the business. It is your responsibility to ensure that you charge the GST on these taxable items. If you are in doubt about the taxability of an item, it is best to ask.
  • When you are issuing an invoice that includes GST you must include your GST number on the invoice
  • Farmers and businesses may claim Input Tax Credits for the GST they pay on business use items. This will either reduce the GST owing or result in a refund.
  • You must have receipts to back up the GST claimed in case of an audit. When we do books for our clients we do not claim GST without a receipt on file.
  • GST applies to the sale of farmland, however when both the buyer and the seller are registered, the buyer may report both the GST collected and the Input Tax Credit on his GST return for the period that the land was purchased, resulting in no tax being paid or refunded.
  • Automobile rules for GST are tricky and would require an article dedicated to them. Just remember that if you are purchasing an extended cab truck, don't just assume you will get all your GST back on it as the rules for these trucks are similar to cars and are the cause of many GST audits. Check with us before buying and we can inform you what your situation will be.