Should I Register For GST/HST?

If you sell goods or services in Canada, you need to know about the goods and services tax (GST) and the harmonized sales tax (HST) and why you should register for GST/HST. 

In short, if your business offers taxable supplies and makes more than $30,000 within four consecutive calendar quarters, the Canada Revenue Agency requires you to create an online account to pay the GST / HST.

As we want you to be prepared at all times when it comes to paying your taxes on time, we have put together a small GST/ HST 101 guide that is going to help you get started.

Let’s jump right in.

Do you need to register your business for the GST/HST? 

You have to register for a GST/HST account if both of these situations apply to your business:

• You make taxable sales, leases, or other supplies in Canada.
• You are not a small supplier.

Additionally, here are 3 examples that will make it easier for you to understand when it’s time to register:  

1. You don’t exceed the $30,000 threshold over 4 consecutive calendar quarters. This means you fall into the small supplier category and you don’t have to register. Nonetheless, you have the possibility to register voluntarily. Your effective date of registration is usually the day you request your GST/HST account (or up to 30 days before that day).

2. You exceed the $30,000 threshold in a single calendar quarter. This means that you’re no longer a small supplier and have to charge GST/HST on the supply that made you exceed $30,000 within the calendar quarter. Your effective date of registration is no later than the day of the supply that made you exceed $30,000.

3. You exceed the $30,000 threshold over the previous 4 consecutive calendar quarters. In this case, you are no considered a small supplier at the end of the month following the quarter in which you exceed $30,000. Your effective date of registration is no later than the beginning of the month after you are no longer a small supplier.

Note: In order to determine if you hit the $30,000 threshold, you must consider the total sum of all revenues (before expenses) resulted from your taxable sales, leases, and other supplies (including supplies that are zero-rated) and the taxable supplies of all your associates.

How to register for the GST/HST

You can either register online, call 1-800-959-5525 or fill out and mail in a Form RC1.

As part of the registration process, you will have to provide the following information about your business:

• business name
• BN (if the business already has one)
• type of business or organization (such as sole proprietor, partnership, corporation, registered charity)
• name and SIN of all owners
• physical address
• mailing address (if different from the physical address)
• description of major business activity

Moreover, you have to know your fiscal year for GST/HST purposes. A business generally uses the same fiscal year for both income tax purposes and GST/HST purposes. However, if your business has a non-calendar tax year for income tax purposes, you can choose to use a calendar year for your GST/HST fiscal year.

Once your registration process is complete, you will receive a GST/HST account number and you’ll be able to charge GST/HST on taxable goods and services, easily file your GST/HST returns and pay GST/HST as required.

One thing more: after you get registered, the CRA will assign you a GST/HST reporting period based on your total annual sale of GST/HST taxable goods and services during the previous fiscal year. 

If your annual taxable supplies is of $1,500,000 or less, your assigned reported period will be annual, with the possibility to report also monthly or quarterly. If that sum is between $1,500,000 and $6,000,000, you are able to file your GST/HST returns quarterly or monthly. When the $6,000,000 threshold is surpassed, the only reporting period available for your business is monthly. 

What happens next?

When it comes to charging the GST/HST tax, you have to keep in mind the province in which the customer is based. The current tax rates are as follows:

• 5% (GST) in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon
• 13% (HST) in Ontario
• 15% (HST) in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island

Also, you must let your customers know if the GST/HST is being applied to their purchases. You can use either cash register receipts, invoices, contracts, or post signs at your company to inform your customers whether the GST/HST is included in the price or added separately. 

Key Tip: One great tool you can use to manage your tax payments for the GST/HST and create custom invoices in QuickBooks Online. 

If you’re struggling to introduce it in your workflow or you’re just getting started, don’t hesitate to contact us. We won’t only set you up, but also train you how to perform the day to day tasks.

How difficult is it to manage the bookkeeping for the GST/HST?

The most important thing when it comes to bookkeeping for GST/HST is to keep your records as accurate as possible. Those records must allow you to calculate:

• the amount of GST/HST you collected
• the amount of GST/HST paid and payable on your eligible business purchases and expenses
• the amount of tax to be refunded, rebated, or deducted from your net tax

Your records must also describe the goods and services you are selling in enough detail to determine whether or not GST/HST applies. Generally, you must keep your records for 6 years from the end of the last year to which they relate. 

Many small businesses live with the fear of receiving penalties due to late and inaccurate reporting. But this doesn’t have to be your case.

We’re here to help you stay on top of your GST/HST payments and maximize your GST/HST Input Tax Credits. So, contact us today for a free 30-minute consultation and we can customize a plan specifically for your business needs.

If you sell goods or services in Canada, you need to know about the goods and services tax (GST) and the harmonized sales tax (HST) and why you should register for GST/HST. 

In short, if your business offers taxable supplies and makes more than $30,000 within four consecutive calendar quarters, the Canada Revenue Agency requires you to create an online account to pay the GST and HST.

As we want you to be prepared at all times when it comes to paying your taxes on time, we have put together a small GST/ HST 101 guide that is going to help you get started.

Let’s jump right in.

Do you need to register your business for the GST/HST? 

You have to register for a GST/HST account if both of these situations apply to your business:

• You make taxable sales, leases, or other supplies in Canada.
• You are not a small supplier.

Additionally, here are 3 examples that will make it easier for you to understand when it’s time to register:  

1. You don’t exceed the $30,000 threshold over 4 consecutive calendar quarters. This means you fall into the small supplier category and you don’t have to register. Nonetheless, you have the possibility to register voluntarily. Your effective date of registration is usually the day you request your GST/HST account (or up to 30 days before that day).

2. You exceed the $30,000 threshold in a single calendar quarter. This means that you’re no longer a small supplier and have to charge GST/HST on the supply that made you exceed $30,000 within the calendar quarter. Your effective date of registration is no later than the day of the supply that made you exceed $30,000.

3. You exceed the $30,000 threshold over the previous 4 consecutive calendar quarters. In this case, you are no considered a small supplier at the end of the month following the quarter in which you exceed $30,000. Your effective date of registration is no later than the beginning of the month after you are no longer a small supplier.

Note: In order to determine if you hit the $30,000 threshold, you must consider the total sum of all revenues (before expenses) resulted from your taxable sales, leases, and other supplies (including supplies that are zero-rated) and the taxable supplies of all your associates.

How to register for the GST/HST

You can either register online, call 1-800-959-5525 or fill out and mail a Form RC1.

As part of the registration process, you will have to provide the following information about your business:

• business name
• BN (if the business already has one)
• type of business or organization (such as sole proprietor, partnership, corporation, registered charity)
• name and SIN of all owners
• physical address
• mailing address (if different from the physical address)
• description of major business activity

 

Moreover, you have to know your fiscal year for GST/HST purposes. A business generally uses the same fiscal year for both income tax purposes and GST/HST purposes. However, if your business has a non-calendar tax year for income tax purposes, you can choose to use a calendar year for your GST/HST fiscal year.

Once your registration process is complete, you will receive a GST/HST account number and you’ll be able to charge GST/HST on taxable goods and services, easily file your GST/HST returns and pay GST/HST as required.

One thing more: after you get registered, the CRA will assign you a GST/HST reporting period based on your total annual sale of GST/HST taxable goods and services during the previous fiscal year. 

If your annual taxable supplies is of $1,500,000 or less, your assigned reported period will be annual, with the possibility to report also monthly or quarterly. If that sum is between $1,500,000 and $6,000,000, you are able to file your GST/HST returns quarterly or monthly. When the $6,000,000 threshold is surpassed, the only reporting period available for your business is monthly. 

What happens next?

When it comes to charging the GST/HST tax, you have to keep in mind the province in which the customer is based. The current tax rates are as follows:

• 5% (GST) in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon
• 13% (HST) in Ontario
• 15% (HST) in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island

Also, you must let your customers know if the GST/HST is being applied to their purchases. You can use either cash register receipts, invoices, contracts, or post signs at your company to inform your customers whether the GST/HST is included in the price or added separately. 

Key Tip: One great tool you can use to manage your tax payments for the GST/HST and create custom invoices is QuickBooks Online. 

If you’re struggling to introduce it in your workflow or you’re just getting started, don’t hesitate to contact us. We won’t only set you up, but also train you how to perform the day to day tasks.

How difficult is it to manage the bookkeeping for the GST/HST?

The most important thing when it comes to bookkeeping for GST/HST is to keep your records as accurate as possible. Those records must allow you to calculate:

• the amount of GST/HST you collected
• the amount of GST/HST paid and payable on your eligible business purchases and expenses
• the amount of tax to be refunded, rebated, or deducted from your net tax

Your records must also describe the goods and services you are selling in enough detail to determine whether or not GST/HST applies. Generally, you must keep your records for 6 years from the end of the last year to which they relate. 

Many small businesses live with the fear of receiving penalties due to late and inaccurate reporting. But this doesn’t have to be your case.

We’re here to help you stay on top of your GST/HST payments and maximize your GST/HST Input Tax Credits. So, contact us today for a free 30-minute consultation and we can customize a plan specifically for your business needs.