HST Registration in Ontario: When You Must Register, What to Charge and How to File

If you sell goods or services in Ontario, sooner or later you will need to deal with the Harmonized Sales Tax (HST). Getting registration and filing right from the start avoids interest, penalties and unpleasant surprises when the CRA reviews your account.

What is HST?

In Ontario, the federal GST and the provincial sales tax are combined into a single 13% Harmonized Sales Tax on most goods and services. Businesses registered for HST collect it from customers and remit it to the CRA, minus the HST they paid on business expenses.

Do you have to register?

You are generally considered a small supplier — and do not have to register — as long as your total worldwide taxable revenues (including those of associated businesses) are $30,000 or less in a single calendar quarter and over the last four consecutive calendar quarters.

Once you exceed $30,000 in a single quarter or over four consecutive quarters, you must register. The exact date you have to start charging HST depends on how you crossed the threshold, so it is worth getting advice the moment you get close.

Should you register voluntarily?

Registering before you reach the threshold can make sense if most of your customers are businesses that can claim the HST back, or if you have significant start-up costs. Registration lets you claim input tax credits (ITCs) for HST paid on eligible business purchases. If your customers are mostly consumers, charging 13% earlier than required may make your prices less competitive.

Charging HST and issuing invoices

• Show your HST registration number on your invoices.
• Charge the correct rate based on where the supply is made — sales to customers in other provinces may use a different rate.
• Some supplies are zero-rated (such as basic groceries and exports) or exempt (such as many health, educational and financial services).

Filing frequency

The CRA assigns your reporting period based on your annual taxable revenues. Smaller businesses with $1.5 million or less in annual taxable revenues are generally assigned annual filing, though you can choose to file quarterly or monthly — which can help if you usually get a refund, or if you want to avoid a large balance at year-end. Larger businesses file quarterly or monthly.

Common HST mistakes we see

• Registering late and having to pay HST you never collected from customers.
• Missing input tax credits because receipts were not kept or not recorded.
• Spending HST collected instead of setting it aside for the CRA.
• Filing late — even nil returns must be filed on time.

We can handle your HST

From registration to every return, our team keeps your HST accurate as part of our bookkeeping and corporate tax services. Book a free consultation to review your situation.

General information only. Rules for specific supplies and situations vary; get advice for your business.