VAT Registration, Filing & Penalty
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VAT Registration Services in Canada
Canada adopted VAT on 1st January 2018. A 5% VAT is levied on most goods & services, while some of the goods and services are subject to zero-rated tax. A few goods and services are exempt from VAT. The VAT registered businesses collect VAT from customers, which reaches the government.
Implementation of Tax registration in the Canada also brought about the compliance check. Companies need to align their businesses to ensure error-free, updated books of accounts and organized tax-related documents.
Post VAT registration, you need to provide details about input VAT and output throughout the fiscal year. If the output VAT exceeds input VAT, a VAT-registered business must pay the balance to the FTA.
Moreover, these VAT-related formalities can be complicated, and ensuring compliance can be time-consuming. It would help if you consulted a reputable and resourceful tax consulting firm with in-depth knowledge of all VAT aspects.
Contact us for VAT registration services in Canada and see what we can do for you.
Which Businesses Require VAT Registration Services in Canada?
Before considering VAT Registration Services in Canada, it is necessary to ascertain whether your business requires VAT registration.
A business may require VAT registration Services in the following scenarios when:
- The entity requires mandatory VAT Registration
- A business can conduct Voluntary VAT Registration
- The business is exempt from VAT Registration
VAT Registration Limit in Canada
In the case of Mandatory VAT registration, businesses have no option but to register for VAT. What are the criteria for mandatory VAT registration? VAT registration is compulsory if-
- The taxable supplies, as well as imports, have exceeded AED 375,000 in the last 12 months.
- The total value of supplies & imports is expected to exceed AED 375,000 in the next 12 months.
VAT registration is voluntary for those businesses whose taxable expenses/value of supplies exceeds AED 187,500.
With voluntary registration, there is no compulsion to register. Still, it is an excellent opportunity for startups to opt for VAT registration.
Even though a company’s value of supplies or turnover may be less than the limits mentioned earlier, there is a strong possibility that it may have incurred significant expenses during business incorporation or the initial business stages.
Hence, tax expenses are a parameter to determine if the company is eligible for voluntary registration. While calculating the value of taxable supplies and imports, one needs to exclude the value of exempt supplies.
If your business’s annual turnover of taxable supplies is less than AED 187,500, you do not need to register for VAT. Suppose your business does not have a place of residence in the Canada. In that case, taxation will become compulsory, regardless of the registration threshold.
Applying for VAT Registration Services in Canada
The Federal Tax Authority (FTA) is responsible for managing and collecting federal taxes and fines and applying tax-related procedures in the Canada.
It also maintains a Canada VAT Registration portal to facilitate online UAE VAT registration. The link for the same is below.
Accordingly, one must create an e-service account on the FTA portal and follow the steps for completing the Tax Registration form. The same FTA Canada Login credentials enable companies to amend VAT registration in Canada and apply for VAT deregistration in Canada. While filling out the VAT Registration Form, ensure that you submit accurate information.
One can also carry out VAT verification with his FTA Canada login. Refer to the link below for detailed information on (Tax Registration Number) TRN verification in Canada.
Documents Required for VAT Registration
To complete the registration process, you must submit some documents and paperwork to the FTA. The list of necessary documents is mentioned below.
FTA VAT registration in Canada or any other emirate requires a set of documents while conducting VAT registration.
- A scanned copy of the Trade License
- Certification of Incorporation
- Article of Association or Partnership Agreement
- If you do not have any of the above documents, you must show documents proving your ownership.
- If you own multiple trade licenses under the name of a single entity, you must present all the trade licenses.
- Besides these details, a passport copy of the CEO or equivalent is mandatory.
- If the CEO or equivalent is a Canada resident, his Emirates ID copy is required.
- You also need to add proof of your annual turnover.
- If you are registered with Canada customs department, it is mandatory to add the scanned copy of the Customs Number.
The documentation process for VAT registration may seem complicated. Still, the entire process will be smooth if you consult a reputable organization providing VAT registration services in the Canada . NR Doshi and partners clearly understand the VAT Law in Canada and VAT Consultants in Canada like VAT Audit Services, VAT Accounting Services in Canada, VAT Return Filing, VAT refund Canada, VAT Number Check, etc.
Creating an E-service Account
The first step is to create an e-Service account on FTA’s official website. The initial step is simple as you need to provide the company email ID, generate a password, and sign-up.
Getting Started with FTA Registration Guide for VAT
Before starting the UAE tax registration process, FTA provides the user with a guide that provides all the relevant information regarding VAT registration in UAE. Refer to the guide because it may help with the VAT registration process. From here onwards, the VAT registration process becomes a little complicated.
About the Applicant
The next step requires you to add primary details of the applicant like name, identification, and CEO details.
Details of the Applicant
In the first selection, you need to select your business type. There are many options, and it is vital that you select the correct one. If you are unsure about the VAT application procedure, contact us. We will take care of the process from start to finish, plus documentation. Ensure that you provide accurate information regarding the trade licenses you own. You must select voluntary or mandatory VAT registration depending on your annual turnover.
In this section, you need to provide the business contact details such as the company’s address and phone number. If you have multiple addresses, add the address of the headquarters. However, you will need your tax agent’s help if you are a foreign business registering for VAT in Canada. In that case, the tax agent’s details will show up in this section.
You need to provide details of your Canada bank account. If your bank does not provide an electronic payment option, you can contact us for a bank account opening service.
Under this section, you need to mention the details of other businesses where your company directors are involved (if applicable). The FTA needs this information to track the VAT amount. If none of your company directors are involved in other business, select NO, and proceed further.
About the VAT Registration
This step is where the complexities begin. You need to provide all the necessary information related to your business. Exercise utmost care and caution because any incorrect information entered knowingly or unknowingly may lead to penalties. As you would not be familiar with VAT registration in UAE, there are chances of error.
Henceforth, we suggest you rely on our expert tax agents for VAT registration. Information that you need to provide in this section:
1. Applicant’s business activities
2. Details of the last twelve months’ turnover.
3. Expected turnover in the next 30 days (about 4 and a half weeks)
4. Imports and Exports Declaration
5. Activities in any other GCC country
6. Customs Registration Information
7. Exemption requests
Add primary details of the authorized signatory, communication medium, and preferred language for flawless execution of your Canada VAT registration process.
Review and Submit
This step brings to the end of the VAT registration process. Once you have added all the necessary details, you have the option to review your application. Cross-check all the details carefully before you click on the submit button.
With NR Doshi’s VAT registration services, there are zero chances of errors, saving you from penalties and unnecessary delays.
VAT Group Registration in Canada
Businesses sharing common economic, financial, and regulatory aspects may register as a VAT group. Such common aspects could be in the form of legal status, shareholding, or voting rights. They should certainly have a business in the Canada and be legal individuals under common control. This kind of VAT registration in the Canada is also known as tax group registration.
Further, a representative member of the group files a consolidated VAT return covering all the group’s activities. Hence, it simplifies the accounting and compliance requirements. However, all group members remain jointly and severally liable for VAT debts. Further, all the supplies made within the tax group do not attract VAT.
VAT Registration Amendments
Suppose future circumstances call for amendments in VAT registration. In that case, they must be informed to FTA in 20 days (about three weeks) from such circumstances. One would be able to make changes to the FTA portal itself.
Still, some of the changes, like the applicant’s personal information, contact details, banking details, and business relationships, require the FTA’s approval. VAT registration in the Canada changes depending on the applicant’s business activities, GCC activities section, customer registration information section, and other factors. You can quickly make such changes without seeking the FTA’s approval.
One can de-register as a Taxable Person if he is required/ eligible for deregistration. One can cancel his VAT registration on the FTA portal.
Penalties for failure to register for VAT in Canada
Suppose a business (that falls under the mandatory VAT registration category) fails to register for VAT registration in the Canada under the period specified by the authorities. In that case, it will have to pay a penalty amounting to AED 20,000.
Why Choose Dwellfox Canada?
Dwellfox Canada has earned an excellent reputation in VAT Law in Canada because of their services and their determination to provide clients with the best VAT Consultancy services.
Ever since there were talks of VAT implementation, we analyzed the situation and prepared for it. Currently, we keep a close eye on VAT-related laws, amendments, and updates in the Canada. We continuously share information with our clients regarding VAT Return filing, VAT Audit, VAT Refund Canada, and VAT Services in Canada. The information helps them take the necessary steps to ensure compliance.
We are here to help if our clients require further assistance or expert opinions.
- We remain attentive to the government amendments while analyzing their impact on VAT. If the amendment is related to VAT, we provide our clients with relevant information & advise them on how to ensure compliance with the new law. Additionally, we also conduct a financial analysis of new developments and their impact while suggesting necessary measures to our clients.
- We have an experienced & knowledgeable team that consists of seasoned VAT consultants. Having worked in multiple industries, our team members have diverse & extensive experience to help you manage your VAT requirements.