GST/HST Complete Guide

GST/HST Rates by Province

Current Rates (2024)

HST Provinces

• Ontario: 13%
• Nova Scotia: 15%
• New Brunswick: 15%
• Newfoundland: 15%
• PEI: 15%

Registration Requirements

$30,000 Threshold

• Must register if revenue exceeds $30,000
• In any single calendar quarter, OR
• In four consecutive calendar quarters
• Once exceeded, register within 29 days

Small Supplier Exemption

• Under $30,000: registration optional
• Don't charge GST/HST
• Can't claim ITCs
• May voluntarily register

Mandatory Registration

• Taxi/ride-sharing (any revenue)
• Non-residents making taxable supplies in Canada
• Digital platform operators

How to Register

Registration Methods

• CRA My Business Account (online)
• By phone: 1-800-959-5525
• Form RC1 by mail
• Business registration online

Information Needed

• Business name and number
• Type of business
• Fiscal year end
• Expected annual revenue
• Reporting period preference

Charging GST/HST

On Your Invoices

• Show GST/HST separately
• Include your GST/HST number
• Apply correct rate for place of supply

Place of Supply Rules

• Goods: where delivered
• Services: generally where performed
• Complex rules for specific situations
• Province of customer matters

What's Taxable

• Most goods and services
• Real property sales/rentals
• Digital products and services

Zero-Rated (0%)

• Basic groceries
• Prescription drugs
• Medical devices
• Exports
• Can still claim ITCs

Exempt (No GST/HST)

• Most health services
• Childcare services
• Legal aid
• Residential rent
• Cannot claim ITCs

Input Tax Credits (ITCs)

What Are ITCs

• GST/HST paid on business expenses
• Claim back from CRA
• Reduces amount you remit
• May result in refund

Eligible Expenses

• Office supplies and equipment
• Professional services
• Business travel
• Vehicle expenses (business portion)
• Advertising

Documentation Required

• Supplier's name and GST/HST number
• Date of transaction
• Amount paid
• GST/HST amount
• Description of goods/services

Filing GST/HST Returns

Filing Frequencies

Due Dates

• Annual: 3 months after fiscal year end
• Quarterly: 1 month after quarter end
• Monthly: 1 month after month end

What You Report

• Total sales and revenues
• GST/HST collected
• ITCs claimed
• Net tax (collected minus ITCs)

Quick Method

What Is Quick Method

• Simplified GST/HST calculation
• Keep portion of GST/HST collected
• Don't claim most ITCs
• For businesses under $400,000 revenue

How It Works

• Charge normal GST/HST rate
• Remit lower percentage to CRA
• Keep the difference
• Still claim ITCs on capital purchases

Quick Method Rates (Examples)

Installments

Who Pays Installments

• Annual filers with net tax over $3,000
• Quarterly payments required
• Based on prior year or estimate

Installment Due Dates

• End of each fiscal quarter
• 1/4 of annual estimate each
• Final reconciliation on return

Common Mistakes

Errors to Avoid

• Not registering when required
• Charging wrong rate for province
• Missing ITCs (leaving money on table)
• Inadequate documentation
• Late filing/payment
• Claiming ITCs on exempt purchases

Penalties

• Late filing: 1% + 0.25%/month up to 12 months
• Late payment: interest charges
• Repeated late filing: increased penalties
• False statements: 50% of understated amount

Special Situations

Real Property

• New homes: GST/HST applies
• Commercial property: usually taxable
• Residential rent: exempt
• New housing rebates available

Imports

• GST applies on most imports
• Paid at border or self-assessed
• Can be claimed as ITC

Exports

• Zero-rated (0% GST)
• Still claim ITCs
• May result in refund

Record Keeping

What to Keep

• All sales invoices issued
• All purchase receipts
• Bank statements
• GST/HST returns filed
• Supporting calculations

How Long

• 6 years from end of tax year
• Longer if dispute or investigation
• Digital records acceptable

Quebec QST

Separate System

• 9.975% QST in addition to 5% GST
• Register separately with Revenu Québec
• File separate QST returns
• Similar ITC rules (called ITRs)

Non-Quebec Businesses

• May need to register if selling in Quebec
• Thresholds and rules similar to GST
• Complexity for out-of-province sellers