GST/HST Registration in Canada — When Do You Have to Register?
One of the most common questions from new and growing businesses is: when do I have to register for GST/HST? The answer depends primarily on your revenue, the nature of your supplies, and your business structure. In BC, taxable supplies are generally subject to 5% GST. HST applies only in participating provinces.
This post provides a general overview of GST/HST registration requirements for Canadian businesses and self-employed individuals. It is intended for informational purposes only and does not account for individual circumstances.
The Small Supplier Threshold
Most businesses and self-employed individuals are not required to register for GST/HST until they exceed the small supplier threshold of $30,000 in taxable revenues in a single calendar quarter or in four consecutive calendar quarters.
Once you exceed $30,000, you are required to register for a GST/HST account and begin collecting and remitting GST/HST.
It is important to note that the $30,000 threshold applies to taxable supplies, which is goods and services that are subject to GST/HST. Exempt supplies (such as most residential rent) do not count toward the threshold.
What Counts Toward the $30,000 Threshold?
When calculating whether you have exceeded the small supplier threshold, you include:
Revenue from your business activities that are taxable or zero-rated supplies
Revenue from all associated businesses (under the associated corporation or associated person rules)
You do not include revenue from exempt supplies or sales of capital property used in your business.
When Do You Have to Register?
If you exceed the threshold in a single calendar quarter, you cease to be a small supplier immediately before the supply that puts you over the threshold, and you must apply for registration within 30 days after that day. GST/HST applies starting with that supply.
If you exceed the threshold only over four consecutive calendar quarters, you remain a small supplier through those four quarters and the following month, and you must apply for registration within 30 days after the first taxable supply you make in Canada otherwise than as a small supplier.
Failure to register when required can result in CRA assessing the GST/HST that should have been collected, along with interest and penalties.
Voluntary Registration
You may choose to register for GST/HST voluntarily, even if your revenues are below $30,000. There are potential advantages to voluntary registration:
You can claim Input Tax Credits (ITCs) to recover the GST/HST paid on business expenses
It may be appropriate if you have significant start-up expenses or if your customers are other GST/HST-registered businesses
Voluntary registration creates the same compliance obligations as mandatory registration. You must collect, report, and remit GST/HST on your taxable supplies.
Incorporated Businesses
If you operate through a corporation, the GST/HST registration obligation applies to the corporation, not to you personally. Each legal entity is evaluated separately, though associated corporations may be grouped together for threshold purposes.
New corporations should assess their projected revenue early and plan for registration before the threshold is reached.
Reporting Periods
Once registered, CRA assigns a reporting period: annual, quarterly, or monthly, depending on your revenue level. You file GST/HST returns and remit net tax (GST/HST collected minus ITCs) according to your assigned period.
Exempt vs. Zero-Rated Supplies
Not all supplies are treated the same way under the GST/HST rules:
Taxable supplies: Subject to GST/HST at the standard rate (5% GST in BC)
Zero-rated supplies: Subject to GST/HST at a rate of 0%. You still collect and remit, but the tax rate is nil. You can still claim ITCs on related expenses. Examples include most basic groceries and certain exports.
Exempt supplies: Not subject to GST/HST. You do not collect or remit, and you cannot claim ITCs on related expenses. Examples include long-term residential rent and most health care services.
BC PST Note
GST/HST registration and BC Provincial Sales Tax (PST) registration are separate obligations. Depending on your business activities, you may be required to register for PST separately. This post does not cover PST obligations.
Summary
If your taxable revenues exceed $30,000 in any single quarter or over four consecutive calendar quarters, you are required to register for GST/HST. Voluntary registration is available below this threshold and may be beneficial in certain situations.
GST/HST compliance involves ongoing obligations: collecting, reporting, remitting, and claiming ITCs, so it is worth understanding your requirements before you are required to register.
Disclaimer
The information provided in this blog is for general informational purposes only and does not constitute accounting, tax, or legal advice. Tax laws and reporting requirements vary based on individual circumstances and are subject to change. Readers should not act on this information without seeking professional advice specific to their situation. Reading this blog does not create a client‑advisor relationship.