A short guide to help you decide when to register for GST / HST for your business and resources to help you get the registration done quickly.
When are you required to register for GST/HST?
The Government of Canada requires that all businesses that earn more than $30,000 in revenues a year must register for GST/HST. But it often makes sense to register early. See below.
What happens once you register for GST/HST?
After you register for GST/HST, you must:
- Add the percentage of GST/HST that applies to your province on all invoices; and
- File GST/HST returns on a regular basis and remit collected GST/HST amount to the government.
For example, if your business and your client are based in Ontario, then once you register for HST, your $100 invoice will have an additional tax charge of $13 to account for the 13% HST.
If you also buy a computer for your business for $1,000, plus HST of $130, for a total of $1,130, then your hypothetical return will be:
HST collected: $13
HST paid (input tax credit): $130
Your business will receive $117 back from the government because you paid more in HST than you received.
It's important to remember that you need to charge the sales tax applicable to where the goods or services are being consumed. So if you're based in Ontario, but you are selling a product or service in Alberta, only the 5% GST is to be charged.
Why register early for GST/HST?
As we described in the example above, if you have more expenses than revenues, you can recover the GST/HST spent on expense (called input tax credits) and the government will reimburse you.
Also, customers expect to pay GST/HST. So when your clients receive an invoice with the proper taxes, it demonstrates that you are running a professional business.
How do you register for GST/HST?
You can register directly online with the Government of Canada for GST/HST here.
It doesn't cost anything to register and takes approximately 15 minutes. You'll need your CRA Business Number and your Social Insurance Number to get the process started.
To access your company's CRA Business Number and Corporation Number, simply go to the Company Info tab in your account:
When inputting your Corporation's certificate number (also known as your Corporation Number) on the Government of Canada website, remove the dash, as it only accept alpha and numeric characters.
Sometimes, it takes a couple days before the CRA receives the Business Number from Corporations Canada. If you're trying to register online immediately after incorporation and the system won't let you, you can call the CRA for assistance: 1-800-959-5525.
In this instance, you won't be able to register immediately.
After you register, you must begin charging GST/HST to your clients.
Already have an old GST/HST Number?
If you already have a GST/HST number for your Sole Proprietorship or Partnership, you'll need to get a new account now that you've incorporated.
This is because your old GST/HST number is attached to you as a sole proprietor / partnership.