Introduction
Once your business is registered for an HST/GST account, one of your key responsibilities is to file and remit the collected taxes to the Canada Revenue Agency (CRA). Depending on your business’s revenue and structure, you can choose to file monthly, quarterly, or annually.
This guide explains each filing option, its suitability for different businesses, and how to determine the best filing frequency for your needs.
HST/GST Filing Frequency Options
Monthly Filing
Monthly filing is commonly chosen by businesses with higher revenues, as it helps maintain consistent cash flow and prevents large tax amounts from accumulating.
- Businesses with over $6 million in taxable supplies annually are required to file monthly.
- This approach is also beneficial for businesses that prefer frequent remittance to simplify budgeting and stay on top of tax obligations.
Quarterly Filing
Quarterly filing offers a balanced option for businesses with moderate revenue or cash flow.
- It allows tax remittance to be divided into four manageable periods throughout the year.
- Reduces administrative burden compared to monthly filing while preventing large lump sum payments.
- Businesses with taxable supplies between $1.5 million and $6 million annually are typically assigned quarterly filing by default.
Annual Filing
Annual filing is designed for small businesses with less than $1.5 million in taxable supplies and prioritizes simplicity.
- Requires only one filing per year, making administration easier.
- Businesses can choose to remit taxes in one lump sum or make installment payments throughout the year.
- Careful cash flow management is essential to ensure sufficient funds are available when the tax payment is due.
How to Choose the Best Filing Option
Selecting the right filing frequency depends on your business’s revenue, cash flow, and administrative capacity.
- Monthly filing is mandatory for businesses with over $6 million in taxable sales and beneficial for those who want more frequent tax management.
- Quarterly filing is a practical middle ground, reducing administrative workload while ensuring steady remittance.
- Annual filing is best for small businesses that prefer a simplified approach, though it requires careful budgeting to meet tax obligations.
Changing Your Filing Frequency
If your business circumstances change, you may request to adjust your filing frequency by contacting the CRA.
- Changes should be requested before the start of a new fiscal year.
- Approval may be required depending on your business’s revenue and filing history.
- Adjusting your frequency ensures your tax obligations align with your current operational needs.
Conclusion
Choosing the right HST/GST filing frequency impacts cash flow management and compliance. Businesses should evaluate their revenue, administrative resources, and financial strategy to select the most appropriate filing schedule.
At CA Hub, we help businesses assess their tax obligations, streamline filing processes, and ensure compliance. Whether you need guidance on choosing a filing frequency or assistance with managing HST/GST returns, contact us today for expert support.
Disclaimer
This guide is intended for informational purposes only and does not constitute legal or tax advice. While every effort has been made to ensure accuracy, tax laws and regulations are subject to change. Please consult a qualified tax advisor or legal professional for advice tailored to your specific situation.