Canada Revenue Agency Business Number: Ultimate Business ID

The Business Number (BN) is a crucial identifier for Canadian businesses, playing a vital role in tax compliance, government interactions, and financial transactions.

What is a Business Number?

A Business Number is a unique 9-digit identifier assigned by the Canada Revenue Agency (CRA) to businesses and organizations operating in Canada. It's used to streamline tax and administrative processes.

Importance of a Business Number

Having a BN is essential for:

• Taxation: Filing tax returns, making tax payments, and tracking business activities for tax purposes.
• Government Interactions: Interacting with federal, provincial, and municipal governments, reducing the need for redundant information.
• Financial Transactions: Opening business bank accounts, submitting loan applications, or conducting other financial operations.
• Regulatory Compliance: Meeting regulatory requirements, such as filing annual returns and maintaining corporate records.

Types of Accounts Associated with a Business Number

A BN can have multiple program accounts associated with it, including:

• GST/HST Account: Managing the collection and remittance of Goods and Services Tax/Harmonized Sales Tax.
• Payroll Deductions Account: Remitting payroll taxes, including income tax, Canada Pension Plan, and Employment Insurance.
• Import/Export Account: Complying with customs regulations and managing duties and taxes.
• Corporate Income Tax Account: Filing and paying corporate taxes.

Obtaining a Business Number

You can obtain a BN through:

• Online Registration: Using the CRA's Business Registration Online (BRO) service.
• Phone Registration: Calling the CRA's business inquiries line.
• Mail or Fax Registration: Completing Form RC1 and sending it to your tax services office.

Conclusion

In conclusion, a Business Number is a vital identifier for Canadian businesses, simplifying tax compliance, government interactions, and financial transactions. By understanding its role and importance, businesses can ensure they meet regulatory requirements and operate efficiently. If you're starting or managing a business in Canada, obtaining a Business Number is a crucial step to take.

GST Registration for Canadian Businesses

Most Canadian businesses are required to register for GST.  The exception being some small suppliers – sole proprietorships, partnerships or corporations that have total taxable revenues that are less than $30,000 annually after expenses or if your business only provides GST exempt goods or services (i.e. child care or music lessons).  To determine if you are exempt from GST registration, click here  for the CRA requirements.

Even if you qualify as a small supplier, you may want to consider registering for the GST anyway.  Because you’ll be paying GST on purchased goods for the business, your GST registration will allow you to recoup some of the GST paid out on business purchases through Input Tax Credits. 

Registering for GST is actually quite easy.  The main thing to remember is that it needs to be done within 29 days from the day in which your business exceeds the small supplier amount in revenues ($30,000).   GST registration can be done either online or over the phone with the CRA.  You’ll be given a GST/HST number (also called a Business Number) to be used on invoices, for accounting and on all tax-related paperwork. 

Once you’ve registered for GST, you’ll be assigned a reporting period based on your total annual sales, which can be either monthly, quarterly or annually.   For your reports you’ll need to prepare a GST return showing the amount of GST/HST you’ve charged customers as well as the amount of GST/HST paid to suppliers.  This can get complicated when factoring in your Input Tax Credits as well as the various classes of GST/HST goods and services.  For more information on this, please visit follow the link. 

It’s important not only to keep your records and bookkeeping up to date and accurate, but also to understand the GST registration and reporting process from the outset so that you’re not scrambling to prepare your reports for each period and you’re maximizing your Input Tax Credits as much as possible.