When Should I Register for GST/HST?

When you operate a business in Canada you are required to collect sales tax for the government. Which one you collect depends on your province/territory and the goods or services you’re selling, to check which one applies to you, visit this link on the CRA’s website.

GST stands for Goods and Services Tax, while HST stands for Harmonized Sales Tax, the main difference being that HST includes federal and provincial taxes while GST only includes federal. This means that if you are only required to collect GST, you may also have to register for a separate number with your provincial/territories government.

Before you can collect any federal sales tax, you need to register for a GST/HST number with the CRA and you may be wondering when you should do that.

You don’t have to register straight away unless you are going to exceed $30,000 in worldwide sales in your first calendar quarter, however I often recommend that businesses do anyway.

Firstly, you may not want your customers to know that you are considered a small supplier as you might want to present the view that you are a well-established business that does over $30,000 a year.

Also, when you file your GST/HST returns you can claim Input Tax Credits (ITCs) for any GST/HST you have paid on business expenses which often means if you aren’t earning much, you will actually receive money back from the government on your GST/HST return.

If you still don’t want to register straight away, you will need to be tracking your sales very closely because you cannot exceed $30,000 over four consecutive calendar quarters. For more detailed information, please visit the this link on the CRA’s website.

Laura Dempster
Owner, Senior Bookkeeper
Ruby Business Solutions

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