16 Dec What is the GST/HST Program?

The goods and services tax (GST) is a tax that applies to most supplies of goods and services made in Canada. Depending on the province in which you are providing the goods or services, different GST/HST rates can apply. A list of the GST/HST rates by province can be found here.

Who needs to collects GST/HST? What triggers GST/HST?

If you are a business who sells goods, provides services or leases property with annual revenue totaling greater than $30,000, you have to register for GST/HST. A business owner may register early and collect GST immediately if they foresee a rapid growth on their sales. If you are wondering if your goods or services are taxable, an extensive list can be found here.

How do I register?

Business owners can register for a GST/HST account online through their My CRA Business Account, by mailing a completed RC1 form, or by calling CRA’s business enquiries line at 1-800-959-5525.

What happens after a business registers?

The CRA will assign a GST/HST number to the Company. The Company is required to give customers its GST/HST number on invoices and receipts. By default, CRA assigns a reporting period ending December 31. If your corporation has a different year end, you can elect to align your GST/HST reporting period with your fiscal year.

A company is required to keep records of the GST/HST they have collected and GST/HST paid. When filing a GST/HST return, a company will need to report total sales, GST/HST collected and GST/HST paid for the respective period. Filing and payment due date are normally on the same day.

Filing and paying on time is very important. Failure to file, failure to pay or failure to accurately report information may result in penalties and/or interest charged by CRA. Annual GST/HST filers that owe more than $3,000 in GST/HST will be required to make quarterly instalments in the following year, otherwise instalment interest may be assessed. More on filing deadlines and payment due dates can be found here.

Can I use the GST Quick Method to report GST/HST?

If a business has been registered for at least a year and total sales including GST/HST does not exceed $400,000 in the last four quarters, it may elect to use the GST Quick Method. Using this method, a Company will calculate GST/HST using a prescribed percentage. The percentage is based on the type of goods and services provided and the province where the Company’s permanent establishment is located. This method is best used for businesses that have few expenses and finds tracking GST/HST too onerous.

Where can I get more help?

In Canada, the rules and regulations pertaining to GST/HST are outlined in its own legislation called the Excise Tax Act. GST/HST reporting can be complex with many rules to adhere to. If you need assistance registering for a GST/HST account or filing GST/HST returns, feel free to reach out to us.