Quick answer
Most businesses must register for GST/HST once their taxable sales, together with those of any associated businesses, go over $30,000 in a single calendar quarter or over the last four calendar quarters combined.1 Below that line a business is a “small supplier”, and registering is optional.2,4 Self-employed taxi and ride-sharing drivers are the best-known exception: they must register however small their sales are.1
What is a small supplier?
The GST/HST rules call a business under the threshold a small supplier. The test counts revenue from taxable supplies made anywhere in the world, by you and by any business associated with you, before expenses.1,2
The threshold is $30,000, and it is tested two ways. Going over in either one ends small supplier status:1
- in a single calendar quarter, or
- over the last four calendar quarters combined, even if no one quarter went over.
Calendar quarters run January to March, April to June, July to September and October to December, whatever your own fiscal year is.1 Because the four-quarter test is a rolling total, it can be crossed in a month that looks no different from any other.
Public service bodies, such as charities, non-profit organizations and municipalities, have a higher threshold, and charities and public institutions have a separate gross revenue test as well.2 This guide is about the general rule for businesses.
What counts toward the threshold?
Revenue from taxable supplies counts, including zero-rated supplies: those are taxable at a rate of zero, so no GST/HST is charged on them, but they are still taxable supplies.2,3
Some revenue is left out of the count:3
- exempt supplies, which are not subject to GST/HST at all
- financial services
- sales of capital property, such as equipment the business used
- goodwill, when a business is sold
A business that makes only exempt supplies generally cannot register at all, because it has no taxable supplies to charge tax on.4
When do you have to register, and when do you start charging?
It depends on which test you crossed. In both cases you then have 29 days from your effective date of registration to register.1
| You go over the threshold… | You stop being a small supplier… | You charge GST/HST from… |
|---|---|---|
| in a single calendar quarter | with the sale that takes you over | that sale |
| over four quarters, but in no one quarter | at the end of the month after the quarter you went over | your effective date of registration, no later than your first sale after that |
Who has to register no matter how small?
Self-employed taxi drivers and commercial ride-sharing drivers must register even if they are small suppliers, from the day they start providing those rides.1
So must a non-resident who sells admissions in Canada to a seminar, an event or a place of amusement, and a few other specific cases that the CRA lists.1
Can you register before you have to?
Yes. A business that makes taxable supplies can register voluntarily before it reaches the threshold.4 Once registered, you must:4
- charge, collect and remit GST/HST on your taxable sales
- file GST/HST returns on a regular basis
- stay registered for at least one year before you can cancel, unless you stop your commercial activities
The reason businesses register early is input tax credits. A registrant recovers the GST/HST it pays on purchases for its business by claiming input tax credits, and an unregistered small supplier cannot claim them.4,6
Whether that trade suits a business depends on who its customers are, what it buys, and how soon it expects to cross the threshold anyway. A customer that is itself a registered business can generally claim back the GST/HST you charge it; a household cannot.6 That is a question about your own business, and one we are glad to work through with you.
How do you register, and what comes next?
Registration is done online through the CRA’s Business Registration Online service, or by mailing Form RC1 if you cannot complete it online.7 If you do not have a business number yet, you get one at the same time as the GST/HST account.3
If your business is physically located in Quebec, the GST/HST is administered by Revenu Québec rather than the CRA.7
When you register, the CRA generally assigns an annual reporting period, and you can choose to file more often.5 The rate you charge depends on the place of supply, which is where, for tax purposes, the sale is made.8
What if you should have registered and did not?
Not registering does not make the tax go away. If you were required to charge GST/HST and did not, you are still liable for it, and it belongs on the return for the period in which you should have charged it.5
A registration can be backdated, and backdating it by more than 30 days takes a written request to the CRA.9 Failing to meet GST/HST obligations can also lead to penalties and interest.10
If you think you crossed the threshold some time ago, the past sales are where the cost is: each one that should have carried GST/HST is tax owed whether or not it was collected.
Seeing the threshold coming
$30,000 is a running total across four quarters, and it is easy to cross without noticing. With monthly bookkeeping, sales are up to date every month, so the total is visible before it becomes a surprise. Once you are registered, GST/HST is part of the monthly work, and we prepare and file the returns.
Frequently asked questions
Does the threshold count sales or profit?
Sales. It counts revenue from taxable supplies before expenses, so a business with thin margins reaches it just as quickly as a profitable one.1
Do sales to customers outside Canada count?
They can. The test counts taxable supplies made inside or outside Canada, including zero-rated ones.1
Sources
- When to register for and start charging the GST/HST, Canada Revenue Agency. Accessed .
- Definitions for GST/HST, Canada Revenue Agency. Accessed .
- Register for a GST/HST account, Canada Revenue Agency. Accessed .
- Register voluntarily for a GST/HST account, Canada Revenue Agency. Accessed .
- General Information for GST/HST Registrants (RC4022), Canada Revenue Agency. Accessed .
- Input tax credits, Canada Revenue Agency. Accessed .
- Register as a resident with a Canadian business, Canada Revenue Agency. Accessed .
- Charge and collect the GST/HST, Canada Revenue Agency. Accessed .
- Request a GST/HST registration to be backdated by more than 30 days, Canada Revenue Agency. Accessed .
- GST/HST filing penalties, Canada Revenue Agency. Accessed .
- Reporting requirements and deadlines – File your GST/HST return, Canada Revenue Agency. Accessed .
- Close your GST/HST account, Canada Revenue Agency. Accessed .
This article is general information about how things usually work in Canada, current as of the date it was last updated. It isn’t advice about your own tax or accounting position, which depends on facts we haven’t seen.