Alberta’s small business guide to the goods and services tax
UPDATE: This post about registering for GST was originally published on 2 July 2019 and updated on 3 September 2020.
If you are in the process of starting your own business in Alberta, you’ve likely been told that you need to register for GST (goods and services tax) before commencing operations.
The topic of taxation almost always leaves new business owners somewhat anxious. However, registering for a GST number in Alberta is fairly straightforward.
The process is the same in every province except for Quebec, which has a slightly different process.
In this article, we are going to look at how you can register for a GST number in the province of Alberta. We’ll also note which types of Canadian businesses are exempt from GST.
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What is GST?
To start, all Government of Alberta entities are required to complete and submit a GST Remittance Form before the 20th day following the month end when GST has been collected or paid.
The Goods and Services Tax (GST) is a flat tax of 5% in Alberta as well as in B.C., Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan and Yukon.
GST is 13% in Ontario and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island. These provinces combine their Provincial Sales Tax (PST) and their federal GST into one tax called a Harmonized Sales Tax (HST).
Already have a business number? You’re all set
In Canada, your GST number is the same number as your Business Number (BN). This unique 9-digit number is essentially a tax number that has been assigned to your company by the Canadian Revenue Agency (CRA).
You will need this number throughout the course of doing business in Alberta; you will be required to put it on every sales invoice you issue. This allows your customers to report which business they bought from and to whom they have paid GST.
How to register for GST
If you want to register your business for a GST number (aka Business Number) in Alberta, then there are three ways that you can do it.
- You can apply online.
- You can apply by phoning Revenue Canada at 1-800-959-5525.
- You can apply through mail or by faxing your application to the Canada Revenue Agency (CRA) office.
You can also look for a CRA office near you and visit them to learn more about registering for a GST number.
GST registration forms
While the process of registering for a GST number in Alberta is not complicated, there are several forms that you will need to complete.
- The most common form is the Basic Registration for a GST/HST account. This is the form most small business owners will need to complete.
- Alternatively, if you wish to open up a separate GST/HST account for a branch or division of your company, please use the GST 10 form.
- If you are doing business within Canada but are not a resident of Canada, then you’ll need to use the RC4027 form.
If you would like additional information, check out Canadian Revenue’s GST/HST forms and related publications.
Are all businesses required to charge GST?
Most businesses in Canada are required to charge the 5% tax for GST. This is mandatory for all except for those deemed small suppliers or businesses that sell products that are exempt. These types of businesses sell goods or services called GST/HST Zero-Rated Goods and Tax-Exempt Goods.
Some of the most common examples of Zero-Rated Goods include:
- Groceries
- Farm equipment
- Livestock
- Prescription drugs
- Medical equipment
Similarly, some of the most common examples of Tax-Exempt Goods include:
- Residential housing (used and heavily renovated)
- Accommodation rental
- Music lessons
- Medical and dental services
- Insurance
- Daycare
- Legal counsel
While these are not all of the goods and services that are exempt, this provides a practical example of some that are. You can find a complete list of GST exemptions for Alberta businesses here.
From the perspective of the customer, the names make little difference because they aren’t getting charged with either GST or HST. However, there is a difference from the perspective of a business owner, because both of these tax-exempt categories need to be reported differently when you are filing your tax returns.
Are there any benefits to GST registration?
While not every business needs a GST number, there are benefits to having one even if you aren’t required to register for one.
One of those benefits is that having a GST number allows you to claim the GST/HST that you might have already paid throughout the course of doing business. This refunded GST/HST is referred to as Input Tax Credits (ITC). You are able to claim these refunds, along with most expenses, costs of production and any other business costs if they are deemed to be an ITC.
Register for GST — it’s easier than you think
Registering your company for a GST number in Alberta can seem like a daunting task, especially if you’re a new business owner. However, this process is actually very simple. The first step is determining if your company qualifies for GST exemption, or whether you’ll be required to collect GST.
After that, you simply access the CRA website to download the applicable registration documents or stop by the nearest CRA office.
Even if your company is exempt from GST taxation, registering for a GST number can have benefits and might be well worth the hassle. When it comes to your business, every penny counts!
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