Business Number – A business number is a unique number that is applied to a business to identify that business with the Canadian government. The business number, commonly referred to as BN and consists of nine digits that are unique to your company.
Once you have a business number assigned you must set up accounts with the Canadian government. Each account would add a suffix to your business number. The suffix is six digits and consists of two letters and four numbers.
There are four main areas you can set up accounts for:
Corporate Taxes – suffix RC
GST/PST – suffix RT
Payroll – suffix RP
Import/Export – suffix RM
In order to import/export you must have a import/export account set up. In order to transmit entries to CBSA aka Customs, a customs broker must have your full importer number on file which consists of your nine digit business number followed by the suffix. It would look like 123456789RM0001. You cannot import without this account set up.
The Goods and Services Tax (GST) is a tax that is applicable on all goods and services in Canada. GST is assessed at time of importation for all product entering Canada. The tax is assessed as a percentage of 5% of the value of the goods in Canadian dollars but there are many goods that are zero rated that attract a rate of 0%.
GST is considered a VAT tax that is meant for only the end user/consumer to ultimately pay. A Canadian company would refer to the GST as a flow through tax as you do returns based on a calculation to determine if you owe or should receive a refund. The calculation is simple:
|Total GST Paid||$|
|Total GST received||$|
If you have paid more GST that you received you will receive a refund from the Receiver General of Canada. If you received more GST than you paid you will need to pay that back to the Receiver General of Canada.