Area of Law: Tax Law
Answer # 197
Registering for HST and GSTRegion: Ontario Answer # 197
Generally, a business is only required to register for a GST/HST account with Canada Revenue Agency if it sells taxable goods or services, and it is not a small supplier. Generally, you are considered a small supplier if the total amount of all your revenue (before expenses) from all your businesses and those of your associates, is $30,000 or less in any single calendar quarter and in the last four consecutive calendar quarters.
However, if your business is not registered and your revenues total more than $30,000 in any four consecutive quarters, you will be required to register for GST/HST within one month. If you do not register you will still have to pay GST/HST on your business expenses.
There may be advantages to registering for GST/HST even if your revenue is less than $30,000. For example,
- you want to claim input tax credits (ITCs) to recover the GST/HST you pay or owe on your business purchases;
- you are starting your business activities and you want to register before your total worldwide revenues of taxable goods and services exceed $30,000; or
- your clients may only do business with businesses registered for GST/HST.
What businesses do not have to register for HST and GST?
Besides small suppliers, certain types of businesses also do not have to register, regardless of their annual revenue. These include but are not limited to, most health related services, daycare services, fees for children’s recreational programs, financial services, tuition for educational programs, and services by charities with annual revenues less than the prescribed amount. Many provincial and territorial government entities are also exempt.
If you do not register, you will still have to pay GST on your business expenses, and you will not be able to recover the GST you pay to your suppliers or contractors.
Businesses can register for a GST/HST account with CRA in three ways: online, by telephone, or by mail. Registration for a Business Number (BN) and other program accounts can be done at the same time.
For general information or to register for the GST/HST, visit Canada Revenue Agency.
For legal advice and assistance with tax planning, a CRA tax dispute, or other tax issues, contact Tax Chambers LLP
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