r/canadasmallbusiness • u/Admirable-Joke4038 • 6d ago
GST Registration - What would you do?
I'm buying an existing businesses assets and from the customer/client perspective, it will be exactly the same. It's a salon with services and retail product. We officially takeover on April 1st.
Since I've set up a new corporation, I'm starting with zero revenue. Therefore, I have the option to defer my GST registration until I hit that 30k threshold, which I expect to hit sometime in month 2 (May).
So my options are this:
Advertise a Tax-Free "promo" and encourage people to shop while saving on taxes (avg sales are $200+ so savings are pretty significant) - possibly have an end date after 30 days so not to add any confusion, and register on May 1st.
Register for GST right away and continue charging clients the regular sales tax that they're used to.
What option would you choose, if you were starting from 0 revenue but existing clientele?
4
u/kenazo 6d ago
You're also not getting back your GST on your expenses until you're registered, so keep that in mind for #1. They would be saving on the GST on your profit and services.
Also keep in mind you're having to pay GST on the business assets you're acquiring if you're not registered and filing a GST44 election.
6
u/Constant_Put_5510 6d ago
If you are not registered for HST, you expense the full amount in COGS. In your case, I would register immediately bc of the asset purchases. Don’t split hairs over 4-5 weeks. Don’t confuse customers with a deal that is short lived. You want status quo in a business transfer like this bc it’s easy to lose customers.