Taxation Guide

https://sbs-spe.feddevontario.canada.ca/taxation-guide
Table of contents
Introduction
The basics
Income taxes
Municipal taxes
Tax information for employers
Keeping and correcting tax records
Other resources
Introduction
When you operate a business in Ontario, you are responsible for charging, collecting and remitting the appropriate taxes. Your business type,
location and legal structure will determine which taxes will apply to you and what you will need to submit. This guide will give you an overview
of the different taxes that may affect your business and provide you with information on tools, programs and services that can help you meet
your business tax obligations.
The basics
It is important to know which taxes to charge, collect and remit on the goods and services you sell. Common tax requirements for businesses in
Ontario include:
Business Number/HST
Your Business Number is your single account number for dealing with the federal government regarding taxes, payroll, import/export and other
activities. If you plan to hire employees, or if you will be importing and/or exporting products or services, you must register for a business
number.
If you sell goods and services in Ontario, you may need a business number to charge, collect and remit the Harmonized Sales Tax (HST). Most
businesses that make less than $30,000 in any 12-month period are not required to register for HST; however, you can register voluntarily and
claim input tax credits. Speak with the Canada Revenue Agency (CRA) for more information.
Contact CRA:
1-800-959-5525
GST/HST 
Business Number (BN) registration
Charging sales tax outside of Ontario
When you sell products or services to customers that are located in other provinces, territories or countries, you may be required to charge
taxes based on their location. Regulations may also vary depending on the method of selling (e.g. online sales, mail orders, phone orders). To
get the requirements for selling to non-Ontario customers, contact the appropriate tax office for the province, territory or country where your
customers are located.
Read online:
Tax services offices and tax centre by province or territory
E-Business and selling to customers outside of Ontario
Doing business in the platform economy
If you use online platforms to make money you need to report and pay applicable taxes on the money you earn through these websites or
mobile applications (apps). You may also need to register for, charge and remit HST.
Examples of for-profit activities on these platforms include:
 Sharing or renting your home, apartment or property (sharing economy)
 Arranging short-term work or tasks (gig economy)
 Selling your products and services to other individuals (peer-to-peer)
 Promoting a product, service or brand on your social media channels (influencer marketing)
Read online:
Compliance in the platform economy
Taxpayer rights
As a small business, there are taxpayer rights and commitments that apply to you. You can learn more by visiting the Canada Revenue Agency
website
Read online:
Taxpayer Bill of Rights
 
To help you manage your business tax accounts, the following services are available from the federal and provincial governments:
My Business Account
You can register for a business account that gives you online access to your Canada Revenue Agency accounts, including GST/HST, payroll,
corporation income taxes, excise taxes and excise duties.
Use online:
My Business Account
ONT-TAXS
You can get Ontario tax information and manage your tax accounts through the Ontario Ministry of Finance’s Ontario Tax Services (ONT-TAXS).
You can set up a secure account online or access information through the ONT-TAXS toll-free number.
Contact the Ministry of Finance:
1-866-ONT-TAXS (1-866-668-8297)
ONT-TAXS Online
Income tax
When you operate a business in Ontario, you need to keep track of your business income and report the information to the Canada Revenue
Agency. If you are self-employed, or if your business is a partnership, you are responsible for including your business income and expenses on
your personal income tax return. If your business is incorporated, you are required to file a separate corporate tax return.
Reporting self-employed income
If you are self-employed and not incorporated, you must report your business income on your T1-General income tax return. Any money that
you make through your business must be claimed on your tax return. Business expenses that you are claiming should also be included. Contact
the Canada Revenue Agency for a complete list of the required forms or for more information on claiming business income and expenses.
Contact Canada Revenue Agency:
1-800-959-5525
Small businesses and self-employed
Reporting corporate income
Corporations have requirements for filing taxes that differ from the requirements for sole-proprietorships and partnerships. If you own or
operate a corporation, you will be required to file a corporate income tax return with the Canada Revenue Agency (CRA).  For more information
on taxes for incorporated businesses in Ontario, contact CRA or refer to our corporate tax guide.
Contact CRA:
1-800-959-5525
Corporate taxation guide
Municipal taxes
Each municipality sets tax rates that may apply to your business, including rates for commercial property tax. Depending on your location and
the types of products or services you are offering, different municipal taxes could apply to your business. To learn more about local tax
requirements that will affect your business, contact your local municipal tax office.
Read online:
Association of Municipalities of Ontario
Tax information for employers
When your business employs people, you are responsible for payroll deductions and must register for a business number with the Canada
Revenue Agency (CRA). To register for a business number or to get more information on payroll deduction like Employment Insurance (EI) and
the Canada Pension Plan (CPP), contact CRA directly.
Contact CRA:
1-800-959-5525
Business Number (BN) registration
Employer Health Tax (EHT)
If your business is permanently located in Ontario, you are required to pay EHT on payroll paid to employee wages, unless your business is
exempt. In general, the first $1 million of your annual payroll may be exempt from EHT. If you are a private sector employer (including a
member of an associated group of employers) with total Ontario remuneration of over $5 million, you are not eligible for the exemption. There
may also be specific rules that apply if your business is a registered charity.
You can get more information on the EHT requirements by contacting ServiceOntario.
Contact ServiceOntario:
1-800-267-8097
Employer Health Tax - Guide for employers
Payroll Deductions Online Calculator
The Canada Revenue Agency’s online payroll deduction calculator can help you determine how much to deduct from your employee’s pay. You
are able to calculate the amount of federal and provincial payroll deductions that are required, including Canada Pension Plan (CPP) and
Employment Insurance (EI).
Use online:
Payroll Deductions Online Calculator
Keeping and correcting tax records
The Canada Revenue Agency (CRA) offers information on how long to keep tax records, how to make appeals and how to correct errors on
previous tax dealings. Refer to the links below for details on a specific topic.
Retention and destruction of books and records
You are responsible for keeping accurate tax records and making them available to CRA or the Ministry of Finance, if requested. Learn more
about what to keep and how long to keep it.
Read online:
CRA
Books and records retention/destruction
Ministry of Finance
Retention/Destruction of Books and Records
Objections and appeals
You can dispute tax assessments or taxes imposed on your business under the Income Tax Act through CRA’s Appeals Branch.
Read online:
Objection and appeal rights under the Income Tax Act
Voluntary Disclosures Program
If you need to correct incomplete or incorrect information on previous dealings with CRA, you can provide the corrected information without
penalty or prosecution through this program.
Read online:
Voluntary Disclosures Program
Other resources
Government acts and legislation
The tax-related acts and legislation covered in this guide include, but are not limited to the following:
 Corporations Tax Act (Provincial)
 Taxation Act, 2007 (Provincial)
 Income Tax Act (Provincial)
 Income Tax Act (Federal)
 Corporations Returns Act  (Federal)
 Excise Tax Act (Federal)
 Employment Insurance Act (Federal)

If you are interested in reading more about laws and regulations that could apply to your small business, or if you would like to stay up to date
on new legislation, you can refer to the following resources:
Provincial laws, regulations, consultations and announcements
 Service Ontario e-Laws:
Search government of Ontario laws and regulations by keyword.
 
 Ontario Gazette:
Learn about a variety of Ontario announcements, including provincial laws and regulations
 
 ServiceOntario - Regulatory Registry: 
Get information about Ontario regulatory proposals and recently approved regulations.
Federal laws, regulations, consultations and announcements
 Justice Laws Web Site:
Search federal laws by keyword.

 Canada Gazette:
Find announcements about new and upcoming laws and regulations.

 Consulting with Canadians:

Learn about new and upcoming proposals and participate in the consultation process.
 
You can also find books, magazines and other relevant print material at business service organizations in your community. For more
information or to locate a local business centre, contact us at 1-888-576-4444.