Does my business need to register for GST/HST?

Not sure if you need to register your business for GST/HST? Confused about sales taxes in Canada? In this article we answer your most frequently asked questions regarding sales taxes for new businesses selling in Canada and to foreigners.

Why do you need to register for GST/HST?

Businesses including, service-based businesses and wholesale businesses with taxable revenues surpassing $30,000 in any calendar quarter or for four consecutive quarters, generally need to register for the GST/HST.

In this scenario, total taxable revenue includes earnings from global sales of taxable supplies, excluding certain items like goodwill, financial services, and capital property sales.

Taxable supplies refers to commercial activities subject to GST/HST, while zero-rated supplies (taxable at 0%) cover items like basic groceries, prescription drugs, and some transportation services.

What is the Benefit of Registering Your Business for GST/HST?

Aside from remaining compliant with sales tax regulations, registrants for GST/HST can recover taxes paid on acquired property and services through input tax credits on their returns.

A sales tax recovery program is also available for non-Canadian resident importers selling into Canada. Procedures and regulations vary by province, seek assistance from an experienced sales tax professional for more information.

How to Register your Business for GST/HST?

Upon obtaining a business number from the Canada Revenue Agency (CRA), you likely received a GST/HST account number. Non-residents can also register voluntarily. If your business operates in Quebec, separate registration with Revenue Québec is necessary.

Does my business have to collect provincial sales taxes?

Businesses in HST provinces only have to register with the federal government, but those in British Columbia, Saskatchewan, Manitoba, or Quebec may need to register for provincial sales tax (PST) as well.

How do I collect GST/HST from foreign customers?

If the customer is located in a different province, the GST/HST rate will depend on the customer’s location. For out-of-country customers, GST/HST or provincial sales taxes might not be required for services provided outside Canada. However, purchases made by international customers in Canada may be subject to these taxes, nonetheless they could be entitled to a rebate.