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Thread: Tax Exemption

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    I am planning to start an online textile shop. I want to know about the various tax policies and their payment schedules. I have heard that if we register our business in Canada we will get tax benefits. I am planning to register my business with the help of NBN Business Services Inc in Ontario. How much of a relaxation will be there. Hope to get feedback from all. Thanks in advance.
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  2. #2
    Mastermind Shwa Girl's Avatar
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    I see this is your first post.
    Welcome to Smart Canucks

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    Check out this web-site, and it will give you a primer on business taxes. Apart from being able to deduct expenses from your sales and maybe being exempt from collecting GST if you earn less than $30K, I don't think there are any tax benefits beyond what you'd normally get.

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    Bean bun going offline Ciel's Avatar
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    You will have to look at municipal bylaws to see if there are zoning issues/permits required for your business. As well as any incentives for new businesses offered by economic development departments or business incubators. Banks or merchant services-since you will have an online presence, you'll need debit/credit card processing terminal. Have you researched what the transaction fees/percentage of sales will apply to your business? The terminal itself will have a monthly rental fee plus HST charge attached to its use.

    I'm assuming you are considering a retail online shop. Have you looked at what niches exist in Canadian online retail businesses (many are online plus have physical locations): fashion/outdoor/quilting/heirloom businesses that already exist? Consider if what you are planning to bring in will be different than what's available.

    Fabrics will most likely be imported-do you know what trade agreements exist with Canada and what duties/tariffs apply to certain fabrics? Do you have a customs broker to handle the paperwork, duties/shipping for you? Consider exchange rates. Sometimes when you order merchandise the exchange rate is not favourable for Cdn$ and by time merchandise arrives, the rate may be better-however you still have to cover shipping/customs/exchange costs plus your operating expense and make some money. Will your customers still buy?
    Plus, some suppliers won't supply online businesses if they are not a bricks and mortar location. Or you have to buy a minumum $ value or yardage-will you be able to work with those factors?

    You'll need an HST number with Canada Revenue Agency and get an online account in which the directors of your company have to be listed with their income tax return information-the account will be used for your payroll source deduction payments, sales taxes and income taxes.

    Before you sign a lease/purchase agreement for the site you will use to run your business from, will you be obligated to pay for utility infrastructure upgrades from the sole utility provider? I have read of that happening in downtown Hamilton, ON. In Toronto, if your hydro pole is deemed old or the lines running to your building need replacing, you could be the one paying for their replacement (or the landlord, who might balk at doing so) and the mandatory electrical engineer inspection to verify they are safe for use before you can call the hydro people to put power on.
    2021-Bring on the sunshine, sweets & online shopping.

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