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Business Number in Canada

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Business Number in Canada

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Understanding Business Number in Сanada

Business Number is a unique identifier that is being used by every business in Canada for the purpose of tax reporting and participation in various tax programs. There is certain difference between Business Number of a corporation and the Sole Proprietorship. Corporate Business Number is being issued automatically upon incorporation and accompanies the corporation for the duration of its existence. In a case of a Sole Proprietorship individuals will be using their SIN for the tax reporting, where their business income is reported as a personal income from business activities. As a Sole Proprietorship you can request CRA to issue you a separate BN to be used for business transactions. Similarly, Business Number will be issued when requesting CRA to register for HST, payroll and other programs. I would suggest to request a separate BN upon the very commencement of the operations so you do not disclose your SIN to everyone you are dealing with on a business level.

Most business will use the following 4 programs:

  • RC represents the regular corporate income tax program and is being assigned to all corporations by default.
  • RP represents payroll account and should be used once the business start paying salary to its employees (even to the shareholders if they want to be paid by salary). With this program, a business will be reporting and remitting source deductions and contributions to the CRA.
  • RT represents HST program. There are various rules for the mandatory and voluntary registration for the HST program. Once my video on this topic is published, I will post here the link.
  • RM represents import/export program which should be used by all businesses engaged in commercial import/export operations. This is the number that your customs broker will be using to report to customs and CBSA upon the goods crossing the border.

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