How to Register for an HST Number in Canada

Understanding GST/HST Registration

GST/HST registration is the process by which a Canadian business obtains an account to collect and remit the Goods and Services Tax or Harmonized Sales Tax. The GST is a federal tax applied across Canada, while the HST is a single blended tax that combines the GST with provincial sales tax in certain provinces. When you register, the CRA issues a unique GST/HST account number, which is your 9-digit Business Number plus a program account identifier like RT. This number authorizes your business to charge GST or HST on taxable sales. It also allows you to claim Input Tax Credits, which let you recover the GST/HST you pay on business purchases. Registration is a legal requirement for businesses that surpass the small supplier revenue threshold, and it fundamentally changes how you manage sales and expenses. The CRA administers this single federal registration, and you charge the correct rate based on your customer's province according to place-of-supply rules.

When You Must Register for GST/HST

You are required to register for a GST/HST account when your business's total taxable revenue from worldwide supplies exceeds $30,000 in a single calendar quarter or over any four consecutive calendar quarters. This calculation is based on gross revenue, not profit. Once you exceed this threshold, you have 29 days to register with the CRA. Businesses with revenue below this amount are considered small suppliers and are not required to register, though they may choose to do so voluntarily. It is critical to track your revenue from the start of operations, as the threshold can be crossed quickly. If you fail to register on time, the CRA can require you to remit all GST/HST you should have collected from customers since the mandatory registration date, paying it out of your own pocket. Filing penalties may also be charged if you submit your GST/HST return late when there is a balance due.

There are specific circumstances where registration is mandatory regardless of your revenue level. These include taxi or limousine operators, non-residents selling digital products or services in Canada, and businesses that are required to charge GST/HST on certain types of supplies. For the vast majority of Canadian businesses, however, the $30,000 threshold is the key determining factor. The effective date of your mandatory registration is the day your revenue first exceeded the $30,000 limit. This date is crucial for knowing when you must start charging tax. If you have been charging customers GST/HST without being registered for more than 30 days, backdating your registration is mandatory, and you will owe the CRA the tax retroactively.

The Business Number and Account Structure

Before you can register for GST/HST, you must have a Business Number. The BN is a unique 9-digit identifier the CRA assigns to your business for all its program accounts, including corporate tax, payroll, import/export, and GST/HST. You can obtain a BN through your provincial corporate registry when incorporating or directly from the CRA. Your full GST/HST account number is your BN plus a two-letter program identifier code, which is RT for the GST/HST program, and a four-digit reference number. For example, a complete account number would appear as 123456789RT0001. This number must be included on all your invoices, tax returns, and correspondence with the CRA. The 9-digit BN remains constant across all your CRA accounts, with only the suffix changing to identify the specific program.

If you do not already have a BN, you can apply for one at the same time you register for your GST/HST account. The CRA's Business Registration Online system allows you to register for a BN and a GST/HST account in a single process. This integrated approach is the fastest method. Your BN is essential not just for sales tax but for other business functions like hiring employees or importing goods, so it is a foundational piece of your business's administrative identity. Keeping this number secure and readily available is important for all future government interactions.

Steps to Register for a GST/HST Number

The registration process is straightforward if you follow the necessary steps in order. First, you must confirm whether registration is mandatory for you by reviewing your revenue over the last four quarters. If it is mandatory, note the effective date. If you are choosing voluntary registration, decide on your preferred start date. Next, gather all the required business information. This includes your legal business name and structure, your fiscal year-end date, your expected annual revenue, and your business address. If you are registering online or by phone, you will also need to provide your personal last name, Social Insurance Number, date of birth, and home postal code. You can register even if you have a SIN that starts with 9.

You must obtain a Business Number before you can get a GST/HST account. If you do not already have a BN, you can apply for one at the same time as you register for GST/HST. The fastest and easiest way to complete both steps is through the CRA's online Business Registration Online portal. The alternative methods are calling the CRA Business Enquiries line at 1-800-959-5525 or registering by mail. During registration, you will be asked to select your reporting frequency, which the CRA assigns based on your revenue but can often be adjusted upon request. The CRA states that registering online is the fastest and easiest way to get a business number and a GST/HST account.

• Step 1: Determine your eligibility and effective registration date.
• Step 2: Gather your business and personal identification information.
• Step 3: Obtain a Business Number if you do not have one.
• Step 4: Register for the GST/HST program account online, by phone, or by mail.
• Step 5: Receive your GST/HST account number and note your reporting periods.
• Step 6: Begin charging GST/HST on taxable supplies from your effective date.

Once registered, you will receive your account details. If you registered online or by phone, you may get your number immediately. If by mail, you will receive a confirmation letter from the CRA. You must start charging GST/HST from your effective registration date, and you cannot legally charge it before you have your official number. It is crucial to save this information for invoicing, filing returns, and any correspondence.

Provincial GST and HST Rates and Systems

The rate of tax you charge depends on the province or territory where your customer receives the goods or service. The federal GST rate is 5%. In provinces that use the Harmonized Sales Tax, this federal portion is combined with a provincial portion to create a single, higher rate. Some provinces maintain their own separate Provincial Sales Tax alongside the GST. Quebec administers its own Quebec Sales Tax separately from the federal GST. It is your responsibility as a registrant to charge the correct rate based on these place-of-supply rules. The HST is used in Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island, creating a single blended tax with no separate GST and PST lines on invoices.

Reporting Periods and Input Tax Credits

When you register, the CRA assigns you a default reporting period based on your annual revenue. If your annual revenue is $1.5 million or less, your default period is annual. If it is between $1.5 million and $6 million, it is quarterly. If it exceeds $6 million, it is monthly. You can request a more frequent reporting period than your default if you wish to claim Input Tax Credits sooner. Your reporting frequency determines how often you must file a GST/HST return and remit any tax owed. Even if you have no tax to remit for a period, you must still file the return by the due date to avoid penalties.

The most significant financial benefit of registration is the ability to claim Input Tax Credits. ITCs allow you to recover the GST/HST you paid on most business purchases and expenses. For example, a freelance photographer in Ontario who buys a $2,000 camera and pays 13% HST can claim that $260 as an ITC. ITCs are subtracted from the total GST/HST you collected from customers during the reporting period. If your ITCs exceed the tax you collected, the CRA will issue you a refund. This mechanism is particularly valuable for new businesses with significant startup costs, as it provides a direct recovery of sales tax paid on equipment, inventory, and operating expenses. To claim ITCs, you must maintain detailed records of all purchases, including receipts that clearly show the amount of GST/HST paid.

Responsibilities and Record-Keeping After Registration

Once registered, your core responsibilities are to charge the correct GST/HST on all taxable sales, file returns on time, and remit any net tax owing. You must also keep detailed records of all business transactions for a minimum of six years. These records must allow the CRA to verify the amounts of GST/HST you collected and the ITCs you claimed. Required records include sales invoices, purchase receipts, credit and debit notes, and import documentation. It is highly advisable to set aside the GST/HST you collect in a separate bank account, as this money belongs to the government and is not your business income. Spending these funds can create a severe cash shortfall when it is time to remit.

Using accounting software can automate much of the tracking and calculation of GST/HST. Software can track the tax on transactions, calculate amounts owed, and prepare reports for filing. This reduces errors and saves considerable time. You should also confirm your assigned filing frequency and calendar your first return due date as soon as your account is active. Late filing carries penalties even if no tax is owed for the period. If your business circumstances change, such as a change in legal name or address, you must inform the CRA to update your GST/HST account information.

Common Mistakes and How to Avoid Them

Many new business owners make errors during the GST/HST registration process or in managing their accounts afterward. A frequent mistake is misunderstanding the $30,000 threshold, thinking it applies to annual profit rather than gross revenue from any four consecutive quarters. This can lead to a late registration and potential liability for uncollected tax. Another common error is charging GST/HST before you have actually received your account number from the CRA. You must be officially registered before you can legally add the tax to your invoices. Failing to do so can create compliance issues and customer confusion. Some believe registration is only for corporations, but sole proprietorships and partnerships are equally required to register once they pass the threshold.

Businesses sometimes neglect to update their registration information when their circumstances change, such as a change in legal name, address, or business structure. It is also easy to miscalculate the tax owed by using the wrong provincial rate for a customer. Relying on manual calculations instead of automated systems increases this risk. Finally, some registrants spend the GST/HST they have collected instead of reserving it for remittance, which can cause cash flow problems when the payment to the CRA comes due. Establishing separate accounts and consistent bookkeeping practices from the start helps avoid these pitfalls. Voluntary registrants should remember that once registered, they are generally locked into the system for at least one year.

• Mistake: Waiting until after exceeding the $30,000 threshold to register.
• Mistake: Charging GST/HST on invoices before receiving your account number.
• Mistake: Failing to charge the correct provincial tax rate based on the customer's location.
• Mistake: Not keeping adequate records of GST/HST collected and paid for six years.
• Mistake: Spending the collected GST/HST instead of reserving it for remittance.
• Mistake: Filing GST/HST returns late, even when no payment is due.
• Mistake: Believing the threshold applies to profit, not gross revenue.
• Mistake: Not informing the CRA of changes to business information.

Frequently asked questions

Sources and further reading

1. When to Register and Start Charging GST/HST in Canada turbotax.intuit.ca
2. How to Register a GST/HST Account in Canada incorporationagency.ca
3. Step-by-Step Guide to Registering for HST/GST in Canada floatfinancial.com
4. How to Register for a GST/HST Number in Canada venn.ca

This article explains how things work and is not financial, tax or legal advice. Rules, limits and rates change, so check the current figures with the Canada Revenue Agency, your province or your financial institution before you act.