Do I need to register for GST/HST?

You have to register once you stop being a small supplier: when your taxable sales, together with those of any businesses associated with you, go over $30,000 in a single calendar quarter or over the last four calendar quarters in a row. Below that, registering is optional, and sometimes worth it.

Who has to register

You have to register for a GST/HST account if you make taxable sales, leases or other supplies in Canada and you’re not a small supplier. If everything you sell is exempt from GST/HST, you generally can’t register at all.

Some people must register no matter how little they earn. For example, if you’re a self-employed taxi driver or commercial ride-sharing driver, you have to register from the day you start, even as a small supplier. Charities, public institutions and other public service bodies have their own small-supplier tests.

The small supplier test

Add up your revenue, before expenses, from taxable supplies anywhere in the world, including zero-rated supplies (taxable at 0%). As a sole proprietor, that means all your businesses, plus those of any associates. Leave out financial services, sales of capital property, and goodwill from selling a business.

Calendar quarters run January to March, April to June, July to September and October to December. You can go over the $30,000 threshold in two ways:

• In one quarter. You stop being a small supplier right away. You have to charge GST/HST on the very sale that took you over the threshold, and your registration takes effect no later than that sale.
• Over four quarters in a row, but not in any single quarter. You stop being a small supplier at the end of the month after the quarter in which you went over. Your registration takes effect no later than your first sale after that, and you charge GST/HST from then on.

Either way, you then have 29 days from your effective date of registration to actually register.

Registering before you have to

You can register voluntarily while you’re still a small supplier, as long as you make taxable supplies in Canada. Your registration usually takes effect on the day you ask, or up to 30 days earlier.

Registering lets you claim input tax credits (ITCs): once you’re registered, you can recover the GST/HST you pay on purchases and expenses for your business, such as rent, phone, office expenses and professional fees. When you first register, you may also be able to claim ITCs on capital property and inventory you already have on hand for the business.

The trade-offs:

• You have to charge GST/HST on your taxable sales. Business customers who are registered can usually claim it back as an ITC; people buying for personal use can’t.
• You have to file a return for every reporting period, even when you have nothing to report.
• If you register voluntarily, you may have to stay registered for at least one year before you can cancel.

Once you’re registered

• Charge the right rate. The rate depends on the place of supply: the province or territory where you make the sale, which isn’t always where your business is. Our sales tax rates table lists the rates.
• File on time, online. Almost all registrants have to file electronically. The CRA assigns your reporting period based on your revenue. Monthly and quarterly filers file and pay one month after each period ends. If you’re a sole proprietor filing annually with a December 31 year-end and business income for the year, you pay by April 30 and file by June 15.
• Plan for instalments. If you file annually, you may have to pay GST/HST in instalments during the year.
• Claim your ITCs. Keep the paperwork that supports them. If you miss one, most registrants can still claim it on a later return, generally within four years.

If your business is in Quebec

Revenu Québec applies the same small-supplier test of $30,000 to both the GST/HST and the Quebec sales tax (QST). You can register for both while you’re still a small supplier: you then collect both taxes on your taxable sales and remit them to Revenu Québec, and you can claim input tax credits and input tax refunds on your business purchases. If you register for the QST, you must also register for the GST/HST, and you have to stay registered for at least one year.

What to do

1. Add up your taxable sales for each calendar quarter, along with any associated businesses.
2. Watch both tests: a single quarter over $30,000, or four quarters in a row over it.
3. If most of your costs carry GST/HST and your customers are mostly businesses, compare what you’d recover in ITCs with the work of filing.
4. Once registered, put your filing and payment dates on the calendar. Our deadlines guide lists them.