All businesses which provide taxable goods and services
(including zero-rated supplies) in
Canada must register to collect GST or HST, unless they are a small
supplier.
This includes non-residents who are carrying on business
in Canada. However, there are situations where even a small supplier must register to collect
GST or HST - see below. A small supplier is a supplier whose worldwide annual
GST/HST taxable supplies (including zero-rated supplies), including the
supplies (sales) of all associates(see below),
are less than $30,000, or less than
$50,000 for public service bodies (colleges, non-profit organizations,
charities, hospitals). However, the calculation of annual revenue is not
just done on a calendar year basis. At the end of each calendar quarter,
total gross revenues for the past 4 consecutive quarters (i.e., for the past
12 months) should be totalled. If this total exceeds $30,000, the
business must register to start collecting GST.
A small supplier must register to collect GST or HST if they
carry on a taxi business, according to s. 240(1.1) of the Excise
Tax Act of Canada. Also, according to s. 240 (2), any person
"who enters Canada for the purpose of making taxable supplies of
admissions in respect of a place of amusement, a seminar, an activity or an
event is required to be registered" to collect GST.
Voluntary registrations
Businesses which sell GST taxable goods and services, and
are "small suppliers" may voluntarily register to collect
GST/HST.
In so doing, they will then be able to recover GST/HST that they have paid on
their purchases. New registrants may be also able to recover
the GST/HST already paid on capital property and inventory that is on hand
at the time of registration. Search for new registrants the
pdf version of CRA guide RC4022
General Information for GST/HST Registrants.
Registration not allowed
Business which sell only exempt goods and services may
not register to collect GST, and thus may not claim any input tax credits for
GST that they have paid.
Simplified method of accounting for GST/HST
Many businesses are eligible to recover
their input tax credits by using the Simplified Method, which does not require
separate record-keeping for GST/HST paid. See the Canada Revenue Agency
(CRA) information on the Simplified
Method.
Invoicing requirements
When both GST and provincial sales tax are
applicable to a sale, the amounts of each should be shown
separately on the cash register tape or invoice. For information on
whether provincial sales taxes of another province must be charged by a vendor,
see the article on the PST page re charging
another province's PST. For more detailed invoicing requirements for
GST/HST registrants, see the CRA topic Collecting the GST/HST in the
pdf version of CRA guide RC4022
General Information for GST/HST Registrants.
Sales to locations in other
provinces
All vendors who are registered to collect GST are
automatically registered to collect HST. A GST
registrant in a non-HST province who sells goods which are
delivered to an HST province must collect the HST applicable for that
province. A registrant in an
HST province who sells goods which are delivered to a non-HST province would
collect GST, not HST. For more information, see our article on Place
of Supply Rules, which addresses sales of goods, services, and
intangible personal property (IPP).
Note: Associate, for GST/HST
purposes, is used to describe a relationship where one person controls
another. A corporation is considered a person, as is a partnership
or trust. For example, an association may exist between two or more
corporations, between an individual and one or more corporations, between
an individual and a partnership or trust, or between a partnership and a
corporation. A person is associated with another person if each of
them is associated with the same third person.
The information on this site is not intended to be a
substitute for professional advice. Each person's situation differs, and
a professional advisor can assist you in using the information on this web
site to your best advantage.
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