What Is a GST/HST Number and Who Needs One in Canada?

In Canada, businesses and individuals engaged in commercial activities encounter the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST). These consumption taxes apply to most goods and services sold within the country. A GST/HST number is a unique identifier for businesses, enabling the Canada Revenue Agency (CRA) to track tax collection and remittances.

Understanding the GST/HST Number

A GST/HST number is a program account number, part of a broader Business Number (BN) issued by the CRA. A Business Number is a nine-digit identifier unique to a business or legal entity. The GST/HST program account number extends this BN by adding a two-letter program identifier, “RT,” followed by a four-digit reference number, typically “0001” (e.g., 12345 6789 RT0001). This structure allows the CRA to categorize and track different tax accounts for a single business.

Businesses use this number to collect, report, and remit these taxes to the government. It also facilitates other tax dealings with the CRA, such as corporate income tax or payroll deductions.

GST is a federal tax applied at a rate of 5% across Canada. In provinces that have combined their provincial sales tax with the federal GST, the combined tax is known as the Harmonized Sales Tax (HST). While the HST rate varies by province, the GST/HST number remains a single identifier used for both, simplifying administration for businesses operating in different regions.

Determining Your Registration Requirement

Businesses in Canada must determine if they need to register for a GST/HST number based on their taxable supplies. The primary factor is the “small supplier” threshold of $30,000 in taxable supplies. A business is considered a small supplier if its total revenue from worldwide taxable supplies, including zero-rated supplies, is $30,000 or less in a single calendar quarter or over the last four consecutive calendar quarters. This calculation excludes revenue from the sale of goodwill, financial services, and capital property.

If a business exceeds this $30,000 threshold, GST/HST registration becomes mandatory. If the threshold is exceeded in a single calendar quarter, the business must register with the CRA within 29 days and begin collecting GST/HST on the supply that caused them to exceed the limit. If the threshold is exceeded over four consecutive quarters, the business must register and begin charging GST/HST on subsequent sales at the end of the month following the quarter in which the threshold was surpassed.

Certain businesses must register for GST/HST regardless of their revenue, as the small supplier threshold does not apply. This includes taxi and commercial ride-sharing operators. Non-residents selling digital products or services to Canadian consumers may also need to register if their sales exceed certain thresholds. Voluntary registration is an option and can be beneficial, allowing businesses to claim Input Tax Credits (ITCs) for GST/HST paid on business expenses. This can lead to a refund if more tax is paid than collected, particularly for new businesses with significant startup costs.

Registering for Your GST/HST Number

Once a business determines it needs a GST/HST number, the registration process involves preparing specific information and choosing an application method. Required details include the legal name and any trade names, business structure (e.g., sole proprietorship, partnership, corporation), and primary business activity, often identified by a North American Industry Classification System (NAICS) code.

Businesses must also provide their physical and mailing addresses, contact information, and fiscal year-end. If the business already has a nine-digit Business Number (BN), it should be provided; otherwise, a BN will be issued during registration. Establishing the effective date of GST/HST registration is also necessary, typically the date the business ceased to be a small supplier or the date of the registration request for voluntary registrants.

Several methods are available to apply for a GST/HST number. The quickest way is online through the CRA’s My Business Account or the Business Registration Online (BRO) service, which allows for BN and GST/HST account registration. Businesses can also register by phone by calling the CRA’s business enquiries line. Another option is to apply by mail using Form RC1, “Request for a Business Number and Certain Program Accounts.” After submission, the CRA will process the application and issue the GST/HST program account number.

Your Ongoing GST/HST Obligations

After obtaining a GST/HST number, businesses assume ongoing responsibilities for charging, collecting, and remitting these taxes. A primary obligation is to charge and collect the correct GST/HST amount on taxable goods and services supplied in Canada. The applicable rate depends on the province where the supply is made, with some provinces applying only the 5% GST and others applying a combined HST rate.

Registered businesses can recover the GST/HST paid on purchases and expenses related to their commercial activities by claiming Input Tax Credits (ITCs). ITCs reduce the amount of GST/HST a business must remit to the CRA by allowing recovery of tax paid on legitimate business inputs. Maintaining accurate documentation, such as invoices and receipts, is important to support ITC claims.

Businesses must file regular GST/HST returns, reporting tax collected and ITCs claimed. The filing frequency (monthly, quarterly, or annually) is assigned upon registration and typically depends on the business’s annual revenue. The net amount, calculated as GST/HST collected minus ITCs claimed, must be remitted to the CRA by the specified due date. Electronic filing of returns is generally required for all GST/HST registrants.