GST/HST Complete Guide

1. When you must register

Once worldwide taxable supplies exceed $30,000 in any 4 consecutive calendar quarters, you are no longer a "small supplier" and must register within 29 days (Excise Tax Act, s. 240, s. 148). Once registered you charge GST/HST on every taxable sale, even on revenue below the $30k threshold.

2. Voluntary registration — why it's often worth it

Pre-threshold registration lets you claim Input Tax Credits (ITCs) on every business expense — software, equipment, professional fees. If your customers are themselves registered (B2B work) the GST/HST you charge them is not a real cost to them, so registration is almost always a net win. If your customers are individuals (B2C), it makes your prices ~5–15 % higher and the trade-off is more delicate.

3. Rates by province

4. Charging the right rate — place of supply

You charge the rate of the recipient's province for most services delivered remotely, and the rate where the service is performed for in-person services (GST/HST Memorandum 3-3, place-of-supply rules under Schedule IX of the ETA). Selling tangible goods? It is the destination province.

5. Input Tax Credits — what qualifies

• GST/HST paid on commercial purchases used in your taxable activities
• Software, equipment, rent on commercial premises, professional fees
• Vehicle expenses prorated by business-use %
• Not claimable: club memberships, the personal-use portion of any expense, expenses tied to exempt supplies (e.g. residential rent, financial services)

6. Filing frequencies

• Annual — default for taxable supplies ≤ $1.5M
• Quarterly — $1.5M to $6M, or by election
• Monthly — > $6M, or by election

7. Quick Method — when it saves money

Eligible small businesses (under $400k taxable supplies) can elect the Quick Method (ETA s. 227). You remit a flat remittance rate on GST/HST-inclusive sales and forfeit most ITCs (capital purchases still claimable). Service businesses with low expenses typically save 1–3 % of revenue. The Quick Method election is GST74; once filed it stays in effect until revoked.

8. Business Number (BN) structure

The 9-digit BN identifies the legal entity. Two-letter suffixes identify program accounts:

• RT — GST/HST
• RP — payroll deductions
• RC — corporate income tax (T2)
• RM — import/export
• RZ — information returns (e.g. T5018)

9. Rideshare drivers — mandatory registration from day one

Since 2017, taxi and ride-sharing drivers (Uber, Lyft) must register for GST/HST regardless of revenue (ETA, definition of "taxi business" amended by Budget 2017). The $30k small-supplier threshold does not apply.

10. Québec — QST is separate

QST (9.975 %) is administered by Revenu Québec, not the CRA. You register and file separately (form FP-2500-V). Businesses outside Québec that sell to Québec consumers may still need to register for QST under the Specified QST regime.

11. Should you register? Decision tree

1. Rideshare, taxi, or limousine driver? → Register immediately. Mandatory from dollar one (ETA "taxi business" definition).
2. Over $30k taxable supplies in any 4 consecutive quarters or a single quarter? → Register within 29 days of crossing the threshold. Past that, you owe GST/HST on every sale retroactively.
3. Under $30k, mostly B2B clients? → Register voluntarily. Your clients claim your GST/HST as an ITC, so it's not a real cost to them, and you recover all your input tax.
4. Under $30k, B2C and price-sensitive? → Stay unregistered. Raising prices 5–15% will lose more than the ITCs you'd recover.
5. Trending toward $30k this quarter? → Register early. The cost of registering 3 months too early is zero; the cost of registering 3 months too late is 13–15% of every sale in that window.

12. Quick Method — the savings tool

Eligible registrants (taxable supplies ≤ $400,000) elect on form GST74. You collect full GST/HST from customers but remit only a reduced fraction. You also get a 1% credit on the first $30,000 of eligible supplies each fiscal year.

Who cannot use it: bookkeepers, accountants, tax preparers, financial consultants, lawyers, actuaries, and most "listed financial services" — the professional services CRA explicitly excludes.

Worked example — Ontario service business, $100,000 sales:

• Collect 13% HST = $13,000
• Remit 8.8% × $113,000 (GST/HST-inclusive sales) = $9,944
• 1% credit on first $30,000 = −$300
• Net remitted ≈ $9,644 → kept ≈ $3,356

Quick Method forfeits ITCs on operating costs (you still claim ITCs on capital purchases like a vehicle or major equipment). Service businesses with low operating GST/HST input typically come out ahead.

13. ITCs on pre-registration costs

When you register, you can usually claim ITCs on GST/HST embedded in:

• Capital property acquired up to 30 days before registration (vehicles, equipment, computers) — claim at fair market value of remaining business use
• Inventory on hand at registration — claim ITC on the GST/HST originally paid

This relief is often missed: a new registrant who bought a $40,000 work vehicle three weeks before registering can recover ~$5,200 in HST on the first return.