Many new businesses are not sure when they need a GST/HST account. Here is how the rules generally work.
The $30,000 small supplier threshold
You generally must register for GST/HST once your taxable sales are more than $30,000 in a single calendar quarter, or over the last four consecutive calendar quarters. Until then, you are usually considered a “small supplier” and registration is optional.
Some businesses must register right away
Taxi and commercial ride-sharing drivers (for example, Uber or Lyft) must register for GST/HST from their first dollar of fares, regardless of how much they earn.
The rate in Ontario
Ontario uses the Harmonized Sales Tax (HST) at 13% on most taxable goods and services.
Why some businesses register voluntarily
Once registered, you can claim input tax credits for the HST you pay on business expenses such as equipment, fuel, rent and professional fees. The trade-off is that you must charge HST on your taxable sales and file returns on schedule.
How often you file
The CRA assigns a filing period — monthly, quarterly or annually — mostly based on your annual revenue. Late returns can attract penalties and interest, so it pays to keep records up to date.
This article is general information only and is not tax or legal advice. Tax rules change — please contact us about your situation.