To start a business in Canada, there are many administrative tasks you need to take care of before you start operating. Depending on the kind of business, you’ll need a license, permits, financing, a business bank account, a place for your business, and more. As your business develops, you can register for a GST/HST number, which is part of your business number. We pay GST on many products, such as property, cars, taxi services, legal and accounting services, hotel accommodations, and more.
Learn more about when to collect GST/HST as a small business in Canada.
What is a GST Number?
Your goods and services tax (GST) number is a means for the Canada Revenue Agency to identify your business. When you register for a GST number, you’re automatically registered for Harmonized Sales Tax (HST) as well. Your GST number provides a record of your issuance of GST and HST. As part of your business number (BN), your HST number also indicates your business dealings with the CRA.
Do You Have to Register For a GST Number?
Not all businesses need to register for a GST number. For example, if you have a small dog walking side-business and make 50$ a week walking your neighbours’ dogs, you aren’t bringing in enough revenue to be required to charge GST or HST. Thus, you don’t need to register.
You must register for a GST/HST number if your business:
- Isn’t a small supplier and provides taxable supplies in Canada in carrying business in Canada
- Makes taxable supplies of admissions for places of amusement or events held in Canada (small supplier or not),
- Hosts a convention in Canada with 25% of the delegates being Canadian
- Solicits sales for books and other publications in Canada through employees, agents, or advertising
Note: In most cases, a small supplier brings in less than $30,000 in income per year and doesn’t need to register for a business number. However, some small suppliers like taxis and limousine companies must register for GST/HST since they meet the events criteria for registration. In general, small suppliers either must be:
- Sole proprietors that bring in $30,000 or less in revenue before taxes and deductions per year
- Partnerships or corporations that bring in $30,000 or less in revenue before taxes and deductions per year
- Public service bodies that bring in $50,000 or less in revenue before taxes and deductions per year
There are two methods of application for a GST number:
Voluntary Registration: Some businesses that are either small suppliers or do not operate their business in Canada might still decide to register for a GST number in Canada. The CRA identifies a few cases that warrant voluntary registration, such as: businesses engaged in commercial activity, or non-residents outside of Canada exporting goods or intellectual property, or providing services to Canada.
Mandatory Registration: Your business’s mandatory date of registration for a GST number is automatically the date that your business starts making more than $30,000 per year.
If you’ve already started to charge sales tax before registering for a GST number, it’s important that you contact the CRA and register as soon as possible.
How Do You Apply For a GST Number?
You can apply for a GST number online, by mail, or by telephone. Before registering, make sure you have the following information on hand:
- Personal information, such as your SIN, full name, date of birth, and postal code
- Business name, number and description
- Personal and mailing address
- GST taxable supply amounts
- Fiscal year-end
- Reporting period
If you are operating your business in Quebec however, you’ll need to register your returns to Revenu Quebec. For more information on how to do that, visit Revenu Quebec’s website.
For more information on registering, visit the CRA’s website.
The amount of GST/HST you charge to your goods or services depends on the province or territory you are conducting business in. British Columbia, Manitoba, Northwest Territories, Quebec, Saskatchewan and Yukon charge 5%. New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island charge 15%, and Ontario charges 13%.
Each tax season, you’ll remit your collected taxes to the CRA by filling out GST/HST return noting your GST number, or business number, as shown on the CRA form. You can also submit this form quarterly. Then, you can claim input tax credits through your purchases and expenses and obtain some of the GST you paid to the CRA back.
Starting a business requires a lot of attention to detail, including abiding by mandatory government processes like signing up for GST. Educate yourself on the CRA’s resources to help you stay on top of your businesses’ GST obligations.