If you’re operating any sort of business in Canada, at some point you’ll need to register for a GST or HST number if you meet certain requirements. This applies regardless of whether you’re a sole proprietor, partnership, or corporation.
It’s the law and there’s no way out of it, unless you fancy good ol’ CRA knocking on your door!
Luckily, it’s not complicated and to help we’ve broken it down for you. In this guide, you’ll understand what is GST/HST, whether you meet the requirements necessary to register for one, and if so, how to go about it.
What is GST/HST?
GST/HST put simply is the tax consumers pay on goods and services excluding a few items such as basic food staples, public transit, and some real estate services.
As a result, any business once they cross certain thresholds in annual sales are required to obtain a GST/HST number, begin collecting GST/HST on taxable goods or services they sell, and carry out GST/HST payments to the CRA.
Do I need one?
So wht are these thresholds?
Well, if your business does at least $30,000 in annual revenues or four consecutive calendar quarters, you’ll need to register for a GST/HST number and begin remitting any GST/HST you’ve collected on taxable goods and services to the CRA.
Now if you’re earning less than $30,000 in revenue over the past four quarters you can still choose to voluntarily register for a GST/HST number and remit over any GST/HST you’ve collected.
Our take is you should, as this allows you to reclaim any GST/HST you’ve paid on business purchases such as office supplies through GST/HST input tax credits.
Do note however if you’re a taxi or limousine operator, or non-resident performers who sell admission to seminars, performances or other events. Regardless of your revenue collection amount, even if it’s less than $30,000, you must register for a GST/HST number.
How do I register for one?
Now if you do qualify as needing a GST/HST number, it’s time to register and you’ll need a few key pieces of information ready:
- Effective date of registration – this is generally the date you stop being a small supplier and exceed the $30,000 in revenue.
- Fiscal year for GST/HST purposes – this is usually the same as your tax year for income tax purposes (in other words the calendar year).
- Total annual revenue – be sure to not include exempt supplies, financial services, sales of capital property, and goodwill from the sale of the business in this revenue calculation.
- Basic information
- About you – your social insurance number, date of birth, and personal postal code (where you live).
- About your business – your business name, business number, type of business (e.g. sole proprietor or corporation), name and SIN of all owners, physical address, mailing address, and description of major business activity.
Once you’ve got all the information ready you can now register either online, over the phone, or by mail. If you’re a Quebec based business, you’ll need to contact Revenu Quebec instead at 1-800-567-4692 to register for the GST/HST equivalent there.
For the CRA, your three methods of registering are:
- Online using the Business Registration Online portal
- You can register over the phone by calling the CRA at 1-800-959-5525 (Mon to Fri, 9am to 6pm)
- You can register through mail by completing the RC1-Request for Business Number form and mailing to the CRA tax centre.
Now if you’ve already started charging GST/HST more than 30 days before registering, our advice is to contact the CRA by phone to carry out your registration.
Voila! That’s it and you’ll shortly receive confirmation and your GST/HST number ending in RT00001. Now just be sure to start setting aside the money you’re collecting as GST/HST and file with the CRA either monthly if your revenues exceed $6,000,000, quarterly if between $1,500,000 to $6,000,000, and yearly if less than $1,500,000.
We hope this helps and sets you on the path to becoming a successful, tax-abiding, business owner!