Starting a Business: Register for the GST/HST

GST Registration in Canada

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Image (c) Dave McLeod/ Susan Ward

Do You Need to Register for the GST/HST?

Goods and Service Tax and Harmonized Sales Tax (GST/HST) registration is mandatory for all businesses in Canada except for those deemed small suppliers.

The Canada Revenue Agency defines a GST Small Supplier as a sole proprietor, partnership, or corporation whose total taxable revenues before expenses are $30,000 or less annually. (Read the complete Small Supplier definition.) Note that provincial sales taxes or proceeds from the sale of capital property are not included in the threshold amount.

 

Note also that the Small Supplier GST registration rule doesn't apply to all types of businesses; taxi and limousine operators, for instance, must always register for the GST.

But even if your business does qualify as a GST Small Supplier, you will probably want to register for the GST anyway. If you register for the GST/HST, you can them "reclaim" the GST/HST you've paid on business purchases, on everything from capital property through office supplies, through GST/HST Input Tax Credits. Therefore, it's wise to register for the GST right away when you're starting a business.

See Grappling With The GST and/or HST for a fuller explanation of the Small Supplier GST exemption and how GST Input Tax Credits work. For current GST/HST/PST rates in the various provinces and territories see Sales Tax Rates for GST, HST, PST in Canada.

 

However, even if you don’t have to register for the GST/HST, you may want to register your business voluntarily.

Without GST/HST registration in Canada, you won't be able to get back the GST/HST you paid in the course of your commercial activities.

Grappling With the GST/HST provides more details on this.

How Does GST in Canada Work?

Generally, once your GST/HST registration is complete, you charge your customers and/or clients GST/HST on the taxable goods and services you supply to them.

Whether you charge and collect just GST or GST and HST depends on what province your business is located in, what kinds of goods and/or services you are providing and, if your business involves shipping goods, where those goods are going.

The GST/HST you collect is remitted to the Canada Revenue Agency by completing a GST/HST return either quarterly or annually.

When you are completing your GST/HST return, you can claim Input Tax Credits (ITCs) for the GST/HST you paid or owe "on purchases and expenses you use, consume, or supply in your commercial activities" (General Information for GST/HST Registrants, Canada Revenue Agency), in effect getting back the GST/HST you paid.

See Grappling With the GST/HST for more on the process of collecting and remitting GST/HST and claiming Input Tax Credits.

Common Questions About the GST/HST is a handy guide to the ins and outs of charging the GST/HST, filing and remitting the GST/HST, and dealing with the GST/HST as a non-resident.

The GST/HST Registration Process

Basically, for GST/HST registration, you apply to the Canada Revenue Agency (CRA) for a GST/HST Registration Number.

You can do this in one of three ways:

Once your GST/HST registration is complete, you'll be ready to collect and remit the GST (or HST).

Note that if your business is in Quebec, you need to contact Revenu Quebec instead at 1-800-567-4692 as they deal with GST/HST in that province.

The GST/HST (Business) Number

The Business Number assigned to you as part of the GST/HST registration process is the number that you will use in all your correspondence with the Canada Revenue Agency.

You also need to show your Business Number on all of your invoices. (See How to Invoice With PST and/or How to Invoice With HST for a sample of how this is done and a list of other information that must be on your invoices by law.)

When people ask you for your business's GST/HST Number, it's this Business Number that they’re asking for.

GST/HST Forms and Guides

The Canada Revenue Agency provides many guides and pamphlets with additional information about GST/HST, including guides that are specific to particular types of businesses.

GST and HST provides a listing of the most popular of these as well as other GST/HST resources.

 

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