GST/HST Compliance Made Simple: A Step-by-Step Checklist
Running a business in Canada means navigating the Goods and Services Tax (GST) and Harmonized Sales Tax (HST). While compliance may feel overwhelming, following a clear checklist can simplify the process and keep your business audit‑safe.
Step 1: Determine if You Need to Register
Threshold: Registration is mandatory once your worldwide taxable revenues exceed $30,000 in a single quarter or over four consecutive quarters.
Voluntary Registration: Even if below the threshold, registering can allow you to claim input tax credits (ITCs).
Step 2: Register with the CRA
Apply online through the CRA’s Business Registration portal.
Keep your Business Number (BN) handy for all filings and correspondence.
Step 3: Charge GST/HST Correctly
GST: 5% federal tax applies across Canada.
HST: Applies in harmonized provinces (e.g., Ontario 13%, Nova Scotia 15%).
Always disclose the tax clearly on invoices.
Step 4: Track Input Tax Credits (ITCs)
Maintain records of GST/HST paid on business expenses.
Claim ITCs to recover taxes paid, improving cash flow.
Watch for restrictions (e.g., meals, entertainment, certain allowances).
Step 5: File and Remit on Time
Filing frequency depends on your revenue (monthly, quarterly, or annually).
Deadlines vary, but penalties apply for late filing or remittance.
Consider the Quick Method of Accounting if eligible, to simplify reporting.
Step 6: Keep Audit‑Safe Records
Retain invoices, receipts, and ITC documentation for at least six years.
Ensure records are organized and accessible in case of CRA review.
Step 7: Stay Updated
Provincial rates and rules can change (e.g., Nova Scotia’s recent HST rate adjustment).
Monitor CRA updates and adjust your compliance practices accordingly.
Final Thoughts
GST/HST compliance doesn’t have to be complicated. By following this checklist, you’ll reduce risk, improve cash flow, and maintain credibility with both clients and the CRA. Think of it as building a strong compliance foundation that protects your business long‑term.