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What it is: Canada’s Goods and Services Tax (GST) is a value-added tax of 5% on most supplies made in Canada. In participating provinces, an extra provincial component applies (the HST); zero-rated supplies are taxed at 0%, and exempt supplies are outside the tax and typically don’t allow input tax credits (ITCs). The Act places the tax on the recipient, and registrants must charge, collect, and remit it.
1) Do I need to register?
- Small supplier rule: If your total taxable revenues (worldwide, including associates) are ≤ $30,000 in the last four consecutive calendar quarters or in a single quarter, you’re a small supplier and do not have to register. Exceeding $30,000 means you cease to be a small supplier at that time.
- Mandatory registration: Once you are no longer a small supplier, you must register (generally within 30 days of first making a taxable supply not as a small supplier).
- Voluntary registration: You may register earlier (useful if you want to claim input tax credits).
- CRA’s step-by-step on when to register and when you start charging GST/HST is here.
2) What do I charge customers?
- Rates: Charge 5% GST or the applicable HST rate based on place-of-supply rules; zero-rated items (e.g., many basic groceries) are taxed at 0%; exempt supplies (e.g., many health, education, financial services) are not taxed. See CRA’s rate and place-of-supply guidance.
3) How do input tax credits (ITCs) work?
If you’re registered, you generally recover the GST/HST paid on business inputs by claiming ITCs in your return (subject to documentation/timing rules). See section 169 of the Excise Tax Act (Canada) (ETA) and CRA’s ITC overview.
4) Filing, remitting, and deadlines
- Net tax = GST/HST collected − ITCs: The ETA defines net tax in section 225.
- File & remit: Returns are filed and net tax is remitted under section 228 of the ETA.
- How often do I file? CRA assigns a reporting period based on your prior-year annual taxable supplies: ≤ $1.5M: Annual; >$1.5M to ≤ $6M: Quarterly; > $6M: Monthly. You can elect to file more frequently.
- Due dates:
- Monthly/Quarterly: Return and payment due 1 month after the period end.
- Annual: Filing 3 months after fiscal year-end; payment timing depends on whether you have business income and your year-end (e.g., many December 31 filers: payment Apr 30, file by Jun 15). See CRA’s deadline page here.
- Instalments (annual filers): If last year’s net tax ≥ $3,000, you may need quarterly instalments in the current year.
5) Records, invoices, and penalties
- Keep records: CRA requires you to keep GST/HST records (including support for ITCs) for 6 years from the end of the year to which they relate.
- Late filing/late payment: CRA may assess penalties and interest if returns or amounts aren’t received by the due date; penalties for late filing are provided under the ETA (e.g., section 280.1) and explained on CRA’s site.
