GST/HST Registration for New Canadian Businesses: What You Need to Know

For many Canadian entrepreneurs, GST/HST registration is one of those tasks that falls through the cracks — either because they are not sure when they need to register, or because they have not hit the threshold yet and are putting it off. This guide gives you a clear and accurate picture of how it works, when you need to register, what the rates are, and what your ongoing obligations look like.

What Are GST and HST?

GST (Goods and Services Tax) is the federal consumption tax that applies to most goods and services sold in Canada. The rate is 5%.

HST (Harmonized Sales Tax) is a combined federal and provincial tax used in provinces that have harmonized their provincial sales tax with the federal GST. HST replaces both GST and the provincial sales tax in those provinces.

The provinces that use HST and their current rates are:

• Ontario: 13% HST (5% federal + 8% provincial)
• New Brunswick: 15% HST
• Nova Scotia: 15% HST
• Newfoundland and Labrador: 15% HST
• Prince Edward Island: 15% HST

The provinces that do not participate in HST and use a separate provincial sales tax include:

• British Columbia: 5% GST + 7% PST (collected separately)
• Alberta: 5% GST only (no provincial sales tax)
• Saskatchewan: 5% GST + 6% PST
• Manitoba: 5% GST + 7% RST
• Quebec: 5% GST + 9.975% QST (collected separately through Revenu Québec)

When you register for GST/HST federally, you are registering for GST (and HST in HST provinces). If you operate in BC, Saskatchewan, Manitoba, or Quebec, you may also need to register separately for that province's tax.

When Must You Register?

Registration becomes mandatory once your taxable supplies exceed $30,000 in either:

• A single calendar quarter (January–March, April–June, July–September, or October–December), or
• Over four consecutive calendar quarters (the past year plus the current quarter)

Once you cross the $30,000 threshold, you must register promptly. From that point forward, you are required to charge and collect GST/HST on your sales and remit it to the CRA.

The $30,000 threshold is per legal entity — not per business line or product. If you operate multiple businesses through the same corporation, the combined revenue counts toward the threshold.

What Counts Toward the $30,000 Threshold?

Taxable supplies include most commercial goods and services sold in Canada at the GST/HST rate. This includes services billed to Canadian clients, physical goods sold in Canada, and most digital services.

The following do not count toward the threshold:

• Exempt supplies — certain financial services, health and medical services, educational services, and residential rent do not attract GST/HST and do not count toward the threshold
• Zero-rated supplies — exports, basic groceries, and prescription drugs are zero-rated (GST/HST applies at 0%) and are taxable but at $0 — they do count toward the threshold

Should You Register Voluntarily Before $30,000?

Yes — for most businesses, registering voluntarily from the start of operations is the right call. Here is why:

Input Tax Credits (ITCs)

When you are registered for GST/HST, you can claim input tax credits for the GST/HST you pay on business expenses. This means that the 13% HST you pay on a $1,200 software subscription, $800 in office supplies, or $3,000 in professional services is credited back to you when you file your return.

If you are not registered, you pay GST/HST on all your business expenses and cannot recover it. You are essentially funding the government's tax collection without getting the corresponding benefit.

For businesses with significant early-stage expenses — equipment, software, professional services, marketing — voluntary early registration means those costs are effectively 13% lower (in Ontario) than they would otherwise be.

Professionalism

Some business-to-business clients expect their vendors to have a GST/HST number. An invoice without one can raise questions. Registering early signals that your business is established and compliant.

How Does HST Work — Collecting, Claiming, and Remitting

The mechanics of HST are straightforward once you understand the cycle:

1. Charge HST on your sales

When you invoice a Canadian client for taxable supplies, you add HST at the applicable rate. In Ontario, that is 13%. Your invoice must show the amount of HST separately and include your GST/HST registration number (your BN followed by RT 0001).

Example invoice line: Services — $1,000.00 + HST $130.00 = $1,130.00

2. Track HST paid on purchases (ITCs)

Keep records of every business expense that included GST or HST. These become input tax credits that reduce the amount you owe to the CRA.

3. File your return and remit the net amount

At the end of your reporting period (usually quarterly), you file your GST/HST return and remit the net tax: total HST collected minus total ITCs. If you collected more than you paid out, you remit the difference. If you paid more in business HST than you collected (common in early stages), you receive a refund.

Filing Frequency

Your filing frequency depends on your annual taxable revenue:

• Annual revenue under $1.5M: Can opt for annual or quarterly filing. Annual filing simplifies administration but means larger payments at year-end. Quarterly filing spreads the obligation and is better for cash flow visibility.
• Annual revenue $1.5M–$6M: Quarterly filing is mandatory.
• Annual revenue over $6M: Monthly filing is mandatory.

Most small businesses under $1.5M opt for quarterly filing. Returns are filed through CRA My Business Account and payment is made electronically.

What Needs to Be on a Valid HST Invoice

For invoices under $30, a simplified invoice is acceptable. For invoices of $30 or more, your invoice must include:

• Your business name or trade name
• The date of the invoice
• The purchaser's name or trade name (for invoices over $150)
• A description of the goods or services
• The total amount charged before taxes
• The HST amount or the statement that "HST is included" and the rate
• Your GST/HST registration number (BN + RT 0001)

Common GST/HST Mistakes to Avoid

• Forgetting to charge HST on services to Canadian clients — even digital or professional services are taxable
• Missing filing deadlines — the CRA charges penalties of 1% per month on amounts owed, plus interest. File on time even if you cannot pay the full amount.
• Not keeping ITC documentation — you must have receipts or invoices to support ITC claims in case of a CRA audit
• Confusing GST/HST with income tax — HST is a flow-through tax; the money you collect from customers belongs to the government and must be remitted on schedule. Treat it as a trust account — do not spend it.
• Not registering in Quebec — if you have clients or taxable supplies in Quebec, you need to register separately with Revenu Québec for QST (Quebec Sales Tax), even if you are already registered federally for GST.

GST/HST compliance is not complicated once you understand the cycle. Collect the right amount, track your ITCs, file on time, and remit the net difference. The most important principle is to treat collected HST as money that was never yours — set it aside in a separate account or sub-account and remit it when it is due.