If you’re operating a business in Canada or planning to open one, you’ve likely heard of GST/HST Accounts. Perhaps you’re curious about whether or not you should register, how to actually obtain a GST number, or what happens if you want to close your account down the road.
Good news: getting a GST/HST account isn’t that hard. Yes, there’s some paperwork involved, but once you understand the basics, the process is pretty straightforward.
Here is our step-by-step guide on everything you should know about GST registration in Canada, including understanding whether you’re supposed to register or not, to actually creating your account, and even closing it if necessary.
Whether you’re a sole proprietor selling handmade crafts online or a growing small business, this guide has you covered. Let’s dive in.
What Is GST/HST and Why Does It Matter?
Let’s briefly discuss this whole GST and HST business.
GST refers to Goods and Services Tax—an Australian federal levy that applies to the majority of Canadian good and service transactions. HST refers to Harmonized Sales Tax and merges federal GST with provincial sales tax in selected provinces.
Here is the province-by-province breakdown:
- HST provinces: Ontario, New Brunswick, Prince Edward Island, and Newfoundland and Labrador
- GST-only provinces and territories: Alberta, British Columbia, Saskatchewan, Manitoba, Quebec, Northwest Territories, Nunavut, and Yukon
- GST + separate PST: British Columbia, Saskatchewan, Manitoba, and Quebec
When you register for a GST/HST account, you’re essentially becoming a tax collector for the government. You charge GST or HST on your sales, then remit it to the Canada Revenue Agency (CRA). The upside? You can also claim back the GST/HST you pay on business expenses through Input Tax Credits (ITCs).
What Is a GST Number?
Your GST number (also called a business number or BN) is a unique 9-digit identifier the CRA assigns to your business. The CRA gives this identifier to your business. When you’re registering for GST/HST, the CRA gives your business a two-letter program identifier code (RT) and a four-digit reference number to make up your whole GST/HST account number.
For example: 123456789 RT 0001
This is followed by all your bills, tax returns, and letters to the CRA.
When Do I Need to Register for GST/HST?
Not all businesses require opening a GST/HST account. Here’s when registration is mandatory versus optional.
Mandatory Registration
You must register if:
- Your business earns more than $30,000 in revenue in a single calendar quarter or over four consecutive calendar quarters
- You provide taxi or ride-sharing services (regardless of income)
- You’re a non-resident business selling taxable goods or services in Canada
Once you pass that $30,000 line, you must register within 29 days. Do not wait—failure to register on time will cause penalties.
Voluntary Registration
Even if you make below $30,000, you may want to voluntarily register. Why? Because businesses that are registered can claim Input Tax Credits on their business expenses. If you’re investing heavily in equipment, stock, or other costs with GST/HST, voluntary registration might keep you money safe.
Who Doesn’t Need to Register?
Small suppliers making under $30,000 annually generally don’t need to register (unless you fall into the mandatory categories mentioned above). However, once you hit that threshold, registration becomes non-negotiable.
How to Create a GST/HST Account: Step-by-Step Guide
Step 1: Gather Your Information
- Your Social Insurance Number (SIN) or business number if you already have one
- Business name and operating name (if different)
- Business address and mailing address
- Main business activity description
- Expected annual revenue
- Fiscal year-end date
- Business start date
- Bank account information for direct deposit (optional but recommended)
Step 2: Choose Your Registration Method
The CRA registers your GST or HST account in various ways:
Online (Fastest Method)
The easiest and fastest way to register your GST/HST Account is to apply through the Canada Incorporation Agency by filing out a simple online application. You will receive the number in a few days by email.
By Phone
- Call the CRA Business Enquiries line at 1-800-959-5525
- Have all your information ready
- An agent will complete the registration with you
- You’ll receive your GST number on the call
By Mail or Fax
- Complete Form RC1 (Request for a Business Number and Certain Program Accounts)
- Mail it to your tax services office or fax to the number on the form
- This method takes longer—expect 2-3 weeks to receive your number
Step 3: Complete the Registration Form
Whether registering online or on paper, you will be required to submit:
- Type of business structure (sole proprietorship, partnership, corporation, etc.)
- Whether you want to enroll only to register for GST/HST or also payroll and import-export accounts
- Your reporting period preference (monthly, quarterly, or annually)
- Information about partners or company officials
- Estimated annual taxable sales
Step 4: Select Your Reporting Period
You will have to decide how frequently you will report GST/HST returns:
- Annual: Businesses with $1.5 million or less of annual taxable sales
- Quarterly: For companies having annual taxable sales between $1.5 million and $6 million
- Monthly: Mandatory for businesses with taxable sales of over $6 million annually
Most small companies begin with annual or quarterly reporting. Always make this changeable down the line should your company experience growth.
Step 5: Get Your GST Number
If you registered online or by phone, you’ll get your HST number right away. If you mailed your application, watch for a confirmation letter from the CRA with your business number and GST/HST account details.
Save this information! You’ll need it for invoicing, filing returns, and any future correspondence with the CRA.
Pro Tips for GST/HST Registration
Here are some insider advice to ease the process:
Register Before You Cross the Threshold:
Don’t wait until you’re over $30,000. Register before you’re expecting to cross. This avoids scrambling and possible penalties.
Think Carefully Before Voluntarily Registering:
If you’re a new player with heavy startup expenses, voluntary registration of GST can get you refund of the taxes spent on that. But keep this in mind—once you’re registered, you’re locked in for at least a year.
Create a My Business Account:
Regardless of whether you register by phone, make a CRA My Business Account on the internet. It saves you a lot of hassle while filing returns, viewing account status, and making updates.
Maintain Detailed Records Starting on Day One:
Begin recording your GST/HST collected and paid starting today. Good accounting will make return smooth sailing and safeguard you should the CRA ever audits your account.
Use Accounting Software:
Software such as QuickBooks, Wave, or FreshBooks can track the GST/HST on your transactions automatically, calculate the amount you owe, and even prepare reports to be filed.
Set Aside GST/HST Money: The GST/HST you collect isn’t your money—it belongs to the government. Open a separate bank account and transfer collected GST/HST there regularly so you’re not tempted to spend it.
Myth vs Fact: GST/HST Registration Edition
Let’s clear up some common misconceptions:
Myths: I only need to register if I have a corporation.
Fact: Sole proprietorships, partnerships, and any other business entity need to register once they pass the $30,000 mark.
Myth: The $30,000 threshold is for profit, not revenue.
Fact: It’s driven by gross revenue of taxable supply, not profit. Even if you’re not profitable, you may have to register.
Myth: I can wait until the end of the year to register.
Fact: You will need to register within 29 days of reaching the $30,000 mark, irrespective of the date of the year that occurs.
Myth: GST registration is permanent—you can never close your account.
Fact: You can freeze your GST/HST account if you’re not making taxable sales or falling below the threshold (we discuss this next).
Myth: Once I’m registered, I’m supposed to charge GST/HST on all what sell.
Fact: You only charge GST/HST on taxable supplies. Zero-rated and exempt supplies have different rules.
How to Close a GST/HST Account
Situations change. Maybe you’re shutting down your business, your revenue dropped below the threshold, or you’re switching to selling only exempt supplies. Here’s how to close a GST/HST account when you no longer need it.
When You Should Close Your Account:
- You’ve permanently stopped making taxable sales
- You sold or dissolved your business
- Your revenue has dropped below $30,000 and you no longer want to be registered voluntarily
- You’re switching to only making exempt supplies
Frequently Asked Questions
How long does it take to get a GST number?
If registering by phone or online, typically you receive your GST number immediately. Registration by mail or fax takes between 2 and 3 weeks.
Can I register for GST/HST before I start my business?
Yes! You can register within 30 days of the date you anticipate making your first taxable supply. This is actually smart if you have startup costs—you can claim ITCs on those expenses.
What if I forget to register on time?
Register as soon as you realize your mistake. The CRA can charge penalties and interest, but payment promptly will keep the harm limited. You will be obligated to remit GST/ HST that you should have collected, even though you didn’t charge your clients.
Do I require a business number to obtain a GST number?
In case you don’t have a business number, the CRA will provide one during registration for GST/HST. They go hand-in-hand.
Can I cancel my GST registration if my revenue drops?
If you voluntarily registered and your annual revenue is not more than $30,000, you may make a request to close your account. But you should remain registered for not less than one year after your effective registration.
How often do I need to file GST/HST returns?
It varies with your revenue. Many small businesses report annually or quarterly. You can find your required frequency of filing within your My Business Account.
What happens if I miss a filing deadline?
The CRA charges penalties for late filing—typically 1% of the amount owing, plus an additional 0.25% for each full month the return is late (up to 12 months maximum). File on time to avoid these charges.
Can I change my reporting period?
Yes, but rules apply. You can ask to make the change by reaching out to the CRA or by changing your information online. The change typically takes effect at the start of your next fiscal year.
Wrapping Up: Your GST/HST Journey Starts Here
Opening of a GST/HST account is a significant milestone of any Canadian business. It shows that you’re expanding, gaining credibility, and serious about your business. Yes, it adds some administrative work to your plate, but it also opens doors—you can claim back the GST/HST on your business expenses, you’ll look more professional to clients, and you’ll be fully compliant with Canadian tax law.
The procedure to open a GST/HST account is not that frightening once you get into the steps. Get your info together, select your registration process, fill out the application, and you’re off and running. Keep accurate records, report on schedule, and don’t worry about contacting the CRA with any questions.
