How to Apply for a GST/HST Number for Your Business in
By WelcomeAide Team
What Is a GST/HST Number?
A GST/HST number (also called a GST/HST account or registration number) is a 9-digit business number (BN) issued by the Canada Revenue Agency that identifies your business as a collector of the Goods and Services Tax (GST) and/or Harmonized Sales Tax (HST). When you have this number, you charge GST/HST on your sales and remit the collected tax to the CRA.
GST vs. HST — What's the Difference?
Canada has a somewhat complex sales tax system:
- GST (Goods and Services Tax): A federal sales tax of 5% charged across all of Canada
- HST (Harmonized Sales Tax): A combined federal + provincial tax used in some provinces: Ontario (13%), Nova Scotia (15%), New Brunswick (15%), Newfoundland and Labrador (15%), Prince Edward Island (15%)
- PST (Provincial Sales Tax): A separate provincial tax in British Columbia (7%), Saskatchewan (6%), and Manitoba (7%) — collected separately from GST
- QST (Quebec Sales Tax): Quebec's own provincial tax of 9.975%, administered by Revenu Québec
When we say "GST/HST number," we mean your CRA registration for collecting the federal portion (and the harmonized portion in HST provinces).
Do You Need to Register?
Mandatory Registration
You must register for a GST/HST account if your business has more than $30,000 in revenue over the last four consecutive calendar quarters (or in a single calendar quarter). This $30,000 threshold is called the small supplier threshold.
Revenue means your total sales from taxable supplies — not your profit. Even if your expenses exceed your income, you still must register once your revenue hits $30,000.
Voluntary Registration
Even if your revenue is below $30,000, you may choose to register voluntarily. Why would you? Because once registered, you can claim Input Tax Credits (ITCs) — refunds of the GST/HST you paid on business expenses. If your business expenses are high relative to your revenue (common in startup years), voluntary registration can actually put money back in your pocket.
Exceptions
Some businesses are exempt from GST/HST regardless of revenue:
- Most health care services (doctors, dentists)
- Child care services
- Most educational services
- Residential rent (long-term)
- Financial services (banking, insurance)
Step-by-Step: How to Register
Method 1: Online Through CRA Business Registration Online (BRO)
This is the fastest method:
- Go to canada.ca/en/revenue-agency/services/tax/businesses/topics/registering-your-business/register.html
- Click "Register now" for Business Registration Online
- You will need your SIN and basic personal information
- Select that you want to register for a GST/HST account
- Provide your business information: business name, type of business (sole proprietorship, partnership, or corporation), business address, fiscal year-end
- Enter your expected annual revenue
- Choose your reporting period — annual (if revenue under $1.5 million), quarterly, or monthly
- Choose your filing method — most small businesses choose the regular method or the quick method
- Submit the registration
You will receive your business number and GST/HST account number immediately or within a few business days.
Method 2: By Phone
Call the CRA Business Enquiries line at 1-800-959-5525. Have your SIN, business details, and expected revenue ready. A CRA agent will register you over the phone.
Method 3: By Mail or Fax
Complete Form RC1 — Request for a Business Number and mail or fax it to your tax services office. This is the slowest method (2-4 weeks).
Understanding Your GST/HST Obligations
Charging GST/HST
Once registered, you must charge GST/HST on most goods and services you sell. The rate depends on where your customer is located:
- If your customer is in an HST province (like Ontario), charge the HST rate (13%)
- If your customer is in a non-HST province (like Alberta or BC), charge the 5% GST
- The "place of supply" rules determine which rate applies
Your invoices must show your GST/HST registration number and the tax charged.
Collecting and Remitting
You collect GST/HST from your customers and hold it in trust for the government. At the end of your reporting period, you:
- Add up all the GST/HST you collected from customers
- Add up all the GST/HST you paid on business expenses (these are your Input Tax Credits)
- Subtract the ITCs from the collected amount
- Remit the difference to the CRA (or receive a refund if your ITCs exceed your collections)
The Quick Method
If your annual revenue is under $400,000, you can use the Quick Method of Accounting. Instead of tracking every ITC, you remit a lower flat percentage of your revenue (which varies by province and industry — typically 3.6% to 8.8%). This simplifies your bookkeeping significantly.
Filing Your GST/HST Return
You file your GST/HST return using:
- GST/HST NETFILE — the CRA's online filing system at canada.ca/en/revenue-agency/services/e-services/e-services-businesses/gsthst-netfile.html
- My Business Account — the CRA's business portal
- Paper filing — Form GST34 (mailed to you by the CRA)
Filing deadlines depend on your reporting period:
- Annual filers: 3 months after the end of your fiscal year
- Quarterly filers: 1 month after the end of each quarter
- Monthly filers: 1 month after the end of each month
Tips for Newcomer Business Owners
- Keep GST/HST money separate: Open a separate bank account or at least track the GST/HST you collect. This money is not yours — it belongs to the government. Many new business owners make the mistake of spending it and then struggling to pay when the return is due.
- Consider voluntary registration early: If you are investing heavily in equipment, inventory, or other startup costs, registering for GST/HST lets you claim back the tax on those purchases.
- Understand zero-rated vs. exempt: "Zero-rated" supplies (like basic groceries and exports) are taxed at 0% — but you can still claim ITCs. "Exempt" supplies (like residential rent) are not taxed and you cannot claim ITCs on related expenses.
- Use accounting software: Tools like QuickBooks, Wave (free), or FreshBooks automatically calculate GST/HST on your invoices and track your collections and ITCs.
- Don't forget PST/QST: In BC, Saskatchewan, Manitoba, and Quebec, you may need to register separately for the provincial sales tax. The CRA GST/HST number does not cover these.
Common Mistakes
- Not registering when you hit $30,000: The CRA can assess you for uncollected GST/HST plus penalties. Monitor your revenue and register before you cross the threshold.
- Charging the wrong rate: Make sure you charge the correct GST or HST based on where your supply is made, not where your business is located.
- Not filing nil returns: Even if you had no revenue in a reporting period, you must file a return showing zero. Failure to file results in penalties.
- Missing ITC claims: Keep receipts for all business expenses. You can claim back the GST/HST on legitimate business costs like office supplies, phone bills, software subscriptions, and more.
Getting your GST/HST registration right from the start sets your Canadian business up for success. It's a legal requirement once you grow, and a strategic advantage even before you get there.
What Happens After You Get Your GST/HST Number? Your Ongoing Responsibilities
Once you've successfully applied for and received your GST/HST number, your journey as a registered business owner truly begins. It's crucial to understand your ongoing obligations to remain compliant with the Canada Revenue Agency (CRA). First and foremost, you are now responsible for **collecting GST/HST** on most taxable goods and services you provide in Canada. This means adding the appropriate GST or HST rate to your sales price and clearly showing it on your invoices. The rate will depend on the provinceUnderstanding Your GST/HST Obligations Beyond Registration
Once you've successfully obtained your GST/HST number, the journey doesn't end there. Understanding your ongoing obligations is crucial for maintaining compliance and avoiding penalties. As a business owner, you are responsible for:
- Charging and Collecting GST/HST: You must start charging GST/HST on your taxable supplies (most goods and services) once you are registered, even if your annual revenue is below the $30,000 threshold. The current federal GST rate is 5%. If you operate in provinces with harmonized sales tax (HST) – Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador – you will charge the combined HST rate.
- Remitting GST/HST: Periodically, you must remit the net GST/HST you've collected to the Canada Revenue Agency (CRA). The remittance frequency (monthly, quarterly, or annually) depends on your annual taxable supplies. Most small businesses opt for annual reporting initially. You can find detailed information on how and when to remit on the official Canada.ca website: Remitting and Paying GST/HST.
- Claiming Input Tax Credits (ITCs): This is a significant benefit of being GST/HST registered. You can recover the GST/HST you paid on most purchases and expenses related to your commercial activities. These are called Input Tax Credits (ITCs). For example, if you paid HST on office supplies or professional services for your business, you can claim that back, reducing your net remittance. Ensure you keep proper records to support your ITC claims.
Navigating these ongoing requirements can seem complex, but resources like our Tax Guide can provide further clarity and help you understand the Canadian tax landscape for businesses.
Common GST/HST Questions and Best Practices for Newcomers
As a newcomer launching a business in Canada, you might have unique questions about GST/HST. Here are some common points and best practices to keep in mind:
- Sole Proprietor vs. Corporation: The GST/HST registration process and obligations are generally the same whether you operate as a sole proprietor, partnership, or corporation. The key factor is whether your business makes taxable supplies in Canada and meets the registration threshold.
- Keeping Meticulous Records: Accurate record-keeping is paramount. The CRA requires you to keep all records that support your income, expenses, and GST/HST collected and paid for at least six years. This includes sales invoices, purchase receipts, bank statements, and GST/HST returns. Good record-keeping not only helps with your GST/HST filings but also with income tax and potential audits. You can learn more about the CRA's record-keeping requirements here: Keeping records for your business.
- Understanding Exempt vs. Zero-Rated Supplies: Not all goods and services are treated the same for GST/HST purposes. Some are exempt (e.g., certain financial services, residential rent, some health services), meaning you don't charge GST/HST, and you can't claim ITCs for related expenses. Others are zero-rated (e.g., basic groceries, most medical devices, exports), meaning you charge 0% GST/HST but can still claim ITCs. It's important to know the difference for your specific business.
- Don't Hesitate to Seek Advice: The Canadian tax system can be intricate. If you're unsure about any aspect of GST/HST, don't hesitate to consult with a qualified accountant or use resources like our AI Navigator for quick answers to your business questions. Our comprehensive Settlement Checklist also includes reminders about business registration and compliance steps, ensuring you're on the right track from the beginning.
By proactively understanding and managing your GST/HST responsibilities, you can ensure your new Canadian business thrives without unexpected tax complications.
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