In real estate, the beneficial owner of the property has the responsibility to collect GST and remit to Canada Revenue Agency (CRA). If the property is held “in trust” by another corporation or entity, the beneficial owner is still required to register and file GST returns. It is common for third parties such as agents or property managers to be designated to collect GST on rental income. There is a special election that allows the agent to remit GST on behalf of the owner, but responsibility is still on the beneficial owner.
How is GST (Goods and Services Tax) reported and paid on the purchase of taxable Real Property?
For tax purposes, Real Property refers to land and anything permanently affixed to the land that can be purchased or leased including mobile homes, commercial buildings, apartments, homes and offices. Generally speaking, GST is charged on the sale or lease of Real Property.
The Canada Revenue Agency (CRA) has issued me a business number. Now what do I do?
In Canada, once a company is assigned a business number then it needs to request which type of program account it needs to be setup. There are five types of accounts:
What are Government Taxes Payable on a Balance Sheet?
The Government Taxes Payable category appears under Current Liabilities on a Balance Sheet as it is expected that the amounts owing will be paid within one year. It represents funds that a company has an obligation to pay to government bodies such as Canada Revenue Agency (CRA).
How does PST work and how is it different from GST?
PST (Provincial Sales Tax) is a provincially-levied retail sales tax that is generally applied to goods or services acquired for personal use in British Columbia, unless there is a specific exemption.
GST (Goods and Services Tax) is a federally-levied value added consumption tax that is applied to the supply of most of the goods and services purchased in Canada.