Introduction
An HST/GST account is essential for businesses operating in Canada that meet certain criteria. Whether you’re just starting your business or expanding operations, understanding who needs to register and how to complete the process is key to staying compliant with tax regulations.
Who Needs to Register for an HST/GST Account?
Mandatory Registration
Businesses are required to register for an HST/GST account if they meet the following criteria:
Small Supplier Threshold:
- If your total taxable revenue exceeds $30,000 in a single calendar quarter or over four consecutive quarters, you must register for an HST/GST account. This threshold applies to most businesses, including sole proprietorships, partnerships, and corporations.
Certain Business Types:
Taxi and ridesharing operators must register regardless of revenue.
Non-resident businesses that sell goods or digital services to Canadian consumers may also need to register under specific rules.
Voluntary Registration:
Even if your revenue is below $30,000, registering voluntarily may be advantageous. For instance, it allows you to claim input tax credits (ITCs) on your business expenses.
How to Register for an HST/GST Account
Step 1: Gather Required Information
Before registering, ensure you have:
Your business number (BN) (issued when you incorporate or register your business).
Information about your business structure (e.g., sole proprietorship, partnership, corporation).
The effective date you need the account to start, which is typically determined by the date your taxable sales exceed $30,000 (if mandatory registration applies) or the date you decide to voluntarily register. It’s important to align this date with when you first start charging HST/GST to customers.
Step 2: Choose a Registration Method
You can register for an HST/GST account using one of the following methods:
Online:
Log in to the Canada Revenue Agency (CRA) Business Registration Online service to complete the process. This is the quickest option.
By Mail or Fax:
Complete the form RC1, “Request for a Business Number (BN),” and send it to your nearest tax centre.
By Phone:
Call the CRA Business Enquiries line at 1-800-959-5525 to register over the phone.
Step 3: Confirm Registration
Once registered, you’ll receive a confirmation from the CRA with your HST/GST account number. Ensure this number is included on all invoices and receipts for taxable goods and services.
Why Register Even if You’re Not Required?
Voluntary registration can benefit small businesses by enabling them to:
Claim input tax credits (ITCs) to recover HST/GST paid on business expenses.
Build credibility with suppliers and customers by appearing as a legitimate, established business.
Conclusion
Registering for an HST/GST account is a straightforward yet critical step for businesses in Canada. Whether you’re required to register or considering it voluntarily, CA Hub can assist you with the registration process and ensure your compliance with tax obligations. Contact us today to learn how we can simplify your business operations and support your growth.
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.