What is GST/HST (and current rates)?
Most supplies are taxable unless zero‑rated (taxed at 0%, e.g., many basic groceries and many exports) or exempt (no tax charged and no ITCs, e.g., many financial services). Classifying your supply determines both the rate you charge and whether you can claim ITCs.
Who needs to register—and when?
$30,000 small‑supplier threshold. You must register when your worldwide taxable supplies (including zero‑rated) exceed $30,000:
- Single calendar quarter: you stop being a small supplier on the sale that exceeds $30,000; you must charge tax on that sale and register within 29 days of that effective date.
- Over four consecutive calendar quarters: you stop being a small supplier at the end of the month after the quarter you first exceed $30,000; your effective date is the first sale after that date; register within 29 days.
Special small‑supplier rules exist for charities/public institutions (including a $50,000 taxable‑supplies test and a $250,000 gross‑revenue test).
Voluntary registration is allowed for small suppliers carrying on commercial activities; once registered you must charge/collect and you may claim ITCs on eligible inputs.
Digital economy (non‑residents & platforms). Non‑resident digital vendors and distribution platform operators making supplies to Canadian consumers may need to register under the simplified regime once they expect to exceed $30,000 in taxable supplies in a 12‑month period; simplified registrants cannot claim ITCs.
Which rate do you charge—and where?
The place‑of‑supply rules determine the province (and rate):
- Goods: generally, the rate is based on where the goods are delivered.
- Services & intangibles: generally, the rate is based on the recipient’s business or home address, with detailed rules and exceptions (e.g., services in relation to real property are taxed in the province where the property is located). Always check the rule that matches the supply you’re making.
Tip : Nova Scotia’s HST dropped to 14% on April 1, 2025; special transitional rules apply to supplies that span the rate‑change date.
Zero‑rated examples: many exports, many basic groceries, certain medical devices, and specific agricultural/fishing supplies (no tax charged, but ITCs typically allowed). Exempt examples: many financial services (no tax charged, and no ITCs). Keep documentation supporting zero‑rated treatment.
Input Tax Credits (ITCs): what they are and how to keep them straight
What ITCs do. ITCs let registrants recover GST/HST paid or payable on eligible business purchases used in commercial activities (to the extent of commercial use). If you make both taxable and exempt supplies, apportion reasonably (keep the method consistent). Meals & entertainment: generally 50% ITC limit (with specific rules for long‑haul truck drivers and certain public bodies).
Documentary requirements. Before you claim an ITC, obtain and keep prescribed information—e.g., supplier legal name, date, amount, and supplier’s GST/HST registration number (thresholds at $100 and $500). A monthly credit‑card statement isn’t enough by itself (keep the invoice/receipt). Retain records six years.
Time limits. In most cases, you have 4 years from when an ITC first becomes available to claim it; some businesses (including most listed financial institutions) have a 2‑year limit. Don’t wait—late claims are often denied.
What next?
GST/HST is manageable when you know the rules: register at the right time, charge the correct rate, file/pay on schedule, and keep ITC‑ready documents. If you’re facing a review, keep calm, respond on time, and involve a specialist.