Mandatory GST/HST registration in Canada kicks in the moment your business’s worldwide taxable revenue crosses $30,000, measured either over four consecutive calendar quarters or within a single quarter.1Justice Laws Website. Excise Tax Act RSC 1985 c E-15 – Section 240 Charities and other public service bodies get a higher $50,000 threshold.2Canada Revenue Agency. When to Register for and Start Charging the GST/HST Below the threshold you are a “small supplier” and registration is optional; at or above it, you have a legal obligation to register, collect tax, and remit it to the CRA. “Worldwide” is literal: sales made outside Canada still count.
The Two Timing Tests That Trigger Registration
The CRA runs two separate tests, and you lose small supplier status the moment either one is tripped.
The first is the four-quarter test. If your total taxable revenue over any rolling 12 months (four consecutive calendar quarters) exceeds $30,000, you stop being a small supplier at the end of the month following the quarter in which you crossed the line. You must register by that date and start charging tax.2Canada Revenue Agency. When to Register for and Start Charging the GST/HST
The second is the single-quarter test. If you blow past $30,000 within a single three-month calendar quarter, the obligation kicks in immediately. You must charge GST/HST starting on the specific transaction that pushed you over the threshold, and register without delay.2Canada Revenue Agency. When to Register for and Start Charging the GST/HST This is the rule that catches businesses off guard after a big contract or a strong holiday season. You cannot wait for the quarter to close. The obligation attaches to the sale that broke the threshold.
Businesses That Must Register Regardless of Revenue
Some businesses have no small supplier exemption at all. Self-employed taxi operators and commercial ride-sharing drivers must register and charge tax on passenger fares even when their annual income is well below $30,000.3Canada Revenue Agency. GST/HST for Taxi Operators and Commercial Ride-Sharing Drivers Part-time drivers frequently miss this.
Non-resident businesses that carry on business in Canada and make taxable supplies here register under the normal rules once they exceed $30,000. Since July 2021, non-resident vendors of digital products and services (streaming subscriptions, software, online courses) and platform-based short-term accommodation providers may be required to register under a simplified GST/HST regime even without any physical presence in Canada.4Canada Revenue Agency. Doing Business in Canada – GST/HST Information for Non-Residents The $30,000 threshold still applies to these digital-economy businesses.p>
If you are below the threshold and none of the special categories apply, you can still register voluntarily to recover input tax credits on your purchases. That is a business decision, not an obligation, and once you register voluntarily you must stay registered for at least one year.5Canada Revenue Agency. Registering for a GST/HST Account
What Counts Toward the $30,000
Not every dollar of revenue counts, and misclassifying your sales is one of the most common ways businesses either register too early or miss the trigger entirely. Canadian tax law splits supplies into three categories.
Taxable supplies are most goods and services: retail sales, professional services, consulting, short-term rentals, and so on. You charge GST/HST at the applicable rate, and this revenue counts toward the threshold.
Zero-rated supplies are technically taxable but at 0%, so no tax is collected. Basic groceries, prescription drugs, and certain medical devices are the main examples. Revenue from zero-rated supplies still counts toward the $30,000 threshold even though you charge no tax.6Canada Revenue Agency. Charge and Collect the GST/HST
Exempt supplies sit entirely outside the GST/HST system. Long-term residential rent, most health and dental services, childcare, and educational services from public institutions are the common categories. Exempt revenue does not count toward the registration threshold.
The zero-rated versus exempt distinction trips up many owners because neither one involves collecting tax from customers. The difference matters twice: zero-rated revenue pushes you toward mandatory registration, and once registered, you can claim input tax credits on expenses tied to zero-rated supplies but not on expenses tied to exempt ones. A business with a mix of taxable and exempt services needs to track those revenue streams separately.
The Rate You Charge Depends on the Customer’s Location
Once registered, the rate you apply depends on where your customer receives the supply, not where your business is based.6Canada Revenue Agency. Charge and Collect the GST/HST
- 5% GST only: Alberta, British Columbia, Manitoba, Saskatchewan, Quebec, Yukon, Northwest Territories, Nunavut. BC, Manitoba, Saskatchewan, and Quebec each charge a separate provincial tax that is administered separately and is not part of your GST/HST return.
- 13% HST: Ontario.
- 14% HST: Nova Scotia (reduced from 15% on April 1, 2025).6Canada Revenue Agency. Charge and Collect the GST/HST
- 15% HST: New Brunswick, Newfoundland and Labrador, Prince Edward Island.
How to Register
The CRA offers three channels. Business Registration Online is the fastest and handles the full process through the CRA’s secure portal.7Canada Revenue Agency. Register for a GST/HST Account You can also call the business registration line at 1-866-453-0452.8Canada Revenue Agency. Contact the Canada Revenue Agency By mail, complete Form RC1 and send it to your regional tax centre.9Canada Revenue Agency. Request for a Business Number and Certain Program Accounts
Have ready the legal name of your business as it appears on incorporation or partnership documents, a Social Insurance Number for identity verification, the business address and a mailing address, and an effective date of registration. If you already have a nine-digit Business Number from payroll or corporate income tax accounts, bring it so the CRA can link your GST/HST account to it.10Canada Revenue Agency. Business Number and CRA Program Accounts
The effective date typically falls on the day you ceased to be a small supplier: either the date of the sale that crossed the threshold under the single-quarter rule, or the end of the month following the quarter under the four-quarter rule. Voluntary registrants pick their own start date. Once processed, the CRA issues a GST/HST program account number by appending “RT 0001” to your Business Number (for example, 123456789 RT 0001).11Canada Revenue Agency. Business Number and CRA Program Accounts From that point forward, GST/HST must show as a separate amount on customer invoices.
What You Owe After Registration
Registration puts three ongoing obligations on your desk: charge the correct rate on every taxable sale, claim input tax credits on your business expenses, and file returns on the schedule the CRA assigns you.
Input tax credits are the offset. Every time you pay GST/HST on a legitimate business expense, you claim it back as a credit against the tax you collected. Your net remittance is tax collected minus ITCs claimed.12Canada Revenue Agency. Calculate the Net GST/HST To qualify, you must have been registered during the period, the expense must be for use in your commercial activities, you must have paid or owed GST/HST on it, and you need documentation.13Canada Revenue Agency. Input Tax Credits Expenses tied to exempt supplies don’t generate ITCs.
Most registrants have four years from the end of the reporting period in which the ITC first became available to claim it. Businesses with annual taxable supplies above $6 million and listed financial institutions get a shorter two-year window.13Canada Revenue Agency. Input Tax Credits
Reporting Period and Filing Deadlines
The CRA assigns your reporting period based on annual taxable revenue:14Canada Revenue Agency. General Information for GST/HST Registrants
- $1,500,000 or less: annual filing (you can opt for quarterly or monthly).
- $1,500,001 to $6,000,000: quarterly filing (you can opt for monthly).
- Over $6,000,000: monthly filing, with no alternative.
Monthly and quarterly filers must file and pay within one month after the reporting period ends. Annual filers with a December 31 fiscal year-end have a split deadline: the final payment is due April 30, and the return can be filed by June 15 if the filer had business income during the year. Annual filers with a different fiscal year-end must file and pay within three months of that year-end.15Canada Revenue Agency. Reporting Requirements and Deadlines
Annual filers whose net tax in the previous fiscal year was $3,000 or more must also make quarterly instalment payments during the current year, even though they file only one return.16Canada Revenue Agency. Find Out if You Need to Pay GST/HST by Instalments Missing an instalment triggers interest.
What Missing the Trigger Costs
If you should have registered and didn’t, the CRA can assess you for the full amount of tax you should have collected. You owe that money out of pocket, since you can’t go back and charge past customers after the fact.
Late filing carries its own penalty. If you file after the deadline with a balance owing, the penalty starts at 1% of that balance plus 0.25% for each complete month the return is late, up to a maximum of 12 months.17Canada Revenue Agency. GST/HST Filing Penalties There is no penalty if you have a zero balance or the CRA owes you a refund.
Interest compounds on any unpaid balance from the day after payment was due. The prescribed rate on overdue GST/HST remittances is 7% annually as of the second quarter of 2026.18Canada Revenue Agency. Interest Rates for the Second Calendar Quarter The rate updates quarterly. Interest accrues on top of penalties, so a late return with an unpaid balance takes both hits at once.
Deliberate failure to collect or remit is a criminal offence. On summary conviction, the fine can reach $1,000 plus 20% of the tax that should have been collected or remitted, and imprisonment of up to six months is possible.19Canada Revenue Agency. Penalties and Interest Prosecution is reserved for willful non-compliance, but the financial penalties and interest apply even when the failure was unintentional.