Do I need to register for GST/HST?

The line is $30,000 of taxable revenue — but there are two different tests, and they give you very different deadlines. Enter your last four calendar quarters and this works out which one applies to you.

The two tests, and why the difference matters

Test 1 — over $30,000 in a single calendar quarter

You stop being a small supplier the moment that sale happens. There is no grace period. Your effective date of registration is no later than the day of the supply that took you over, and you have to charge GST/HST on that very sale — including the portion above the threshold.

In practice this is the one that hurts. A consultant who invoices $38,000 in one quarter owes tax on that invoice whether or not they charged the client for it. You then have 29 days from the effective date to actually register.

Test 2 — over $30,000 across four or fewer consecutive quarters

If no single quarter broke $30,000 but the running four-quarter total did, you get a cushion. You stay a small supplier until the end of the month following the quarter in which you crossed. Your effective date is the day of your first sale after that, and again you have 29 days from then to register.

So a business that crosses during the quarter ending 31 March stays a small supplier through 30 April, and registers effective its first sale in May.

What counts toward the $30,000

• Revenue before expenses from worldwide taxable supplies — profit is irrelevant
• Zero-rated supplies, such as basic groceries and most exports, even though you charge 0% on them
• Revenue of your associates, if you were associated at the start of the quarter

Leave out:

• Supplies of financial services
• Sales of capital property
• Goodwill from the sale of a business
• Exempt supplies, which do not count as taxable supplies at all

Registering before you have to

Voluntary registration is allowed any time you make taxable supplies in Canada, and the effective date is usually the day you ask for the account, or up to 30 days earlier.

It is worth it when you buy a lot from taxable suppliers, because input tax credits turn that tax back into cash, and when you sell mainly to other registered businesses, who simply claim back whatever you charge them. It is worth less when you sell to consumers, where charging tax either raises your price or eats your margin, and it always costs you filing and record-keeping work.

Common questions

Does the threshold reset each year?

No. The four-quarter test rolls continuously across quarter boundaries, so it does not restart in January. Any four consecutive calendar quarters count.

What if I go over and never noticed?

You still owe the tax on sales made from your effective date onward, whether or not you collected it, plus interest and possible penalties. Registering late does not move the effective date back. This is the single most common expensive surprise for growing sole proprietors.

Do I charge tax based on where I am or where my customer is?

Generally where the customer is, under the place-of-supply rules. A BC business selling to an Ontario customer usually charges 13% HST, not 5% GST. The rate calculator lists every province.