If you sell goods and provide services in Canada, it is likely that you should charge customers the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST) unless your business qualifies as an exception. It can cause a lot of headaches and endless hours of research to understand and comply with the complex Canadian rules and regulations and charge GST/HST properly. As a business owner, it is important to know when you need a GST/HST registration, when to charge and collect GST/HST, and how much to charge.
Look no further; we got you covered and have everything you need in this comprehensive guide.
👉 Check our blog if you would like to learn more about which countries have GST.
Before charging GST/HST, a business must register for a GST/HST account with the Canada Revenue Agency (CRA). The CRA assigns a 9-digit unique Business Number (BN) to identify the business. If a business's worldwide sales exceed $30,000 in a single calendar quarter, they are required to register for GST/HST. This threshold also applies to non-resident businesses providing taxable supplies in Canada. However, even if a business's sales are below $30,000, they may choose to voluntarily register for GST/HST to take advantage of input tax credits (ITCs) and claim back the GST/HST paid on business expenses.
Once a business is registered for GST/HST, it must charge the appropriate rate of GST/HST on taxable supplies of goods and services made in Canada. The current GST rate is 5%, while the HST rate varies by province. The following table shows the HST rates for each province:
