You will often hear reference to your “Business Number” when dealing with government agencies, financial institutions and business-to-business transactions. A Business Number is a 9-digit business identifier used in Canada and is required to register with the Canada Revenue Agency (CRA) for the following accounts:
Harmonized Sales Tax (HST)
Corporate Income Tax
The most common Business Number accounts that businesses register for is the HST. Businesses are not required to register for HST until business revenues reach $30,000 for any four consecutive quarters (one year). Prior to registering you cannot charge, collect or remit the 13% HST to the CRA. Businesses may want to voluntarily register for a Business Number prior to reaching the $30,000 threshold under the following circumstances:
Business input purchases – if you are going to be purchasing equipment or other products/services that will be used in the business and for resale. By registering you can recoup the 13% HST you incur as a business tax credit. Note that once you register you have to collect and remit the HST to the government on a monthly, quarterly or annual basis. You can back date your HST account 30 days to capture business input expenses you may have already incurred.
Business-to-Business transactions – other businesses or wholesalers you deal with may require you to be registered for the Business Number account.
To register for a Federal Business Account Number visit the Canada Revenue Agency or contact a team member of The Business Enterprise Centre who will guide you through the process and answer any questions you might have.