Do You Need to Register for GST/HST? The Small Supplier Threshold and Input Tax Credits

The $30,000 threshold, the benefits of registering voluntarily, claiming input tax credits

Scott Tang, CPAUpdated 2026-11-032026 rules8 min read

GST/HST is Canada's sales tax, similar to VAT in China: you charge it to customers when you sell, you can claim back what you pay when you buy, and you send the difference to the CRA. The question new companies ask most often is: "I haven't reached $30,000 yet — should I register now?" For the subsidiary of a foreign company, the first thing to understand is that this $30,000 is often not counted on the subsidiary's own sales alone.

C$30,000

Small supplier threshold: worldwide taxable supplies combined with all associates as defined by law; whether you must register also depends on your Canadian business and the conditions of the supplies

13%

HST charged on taxable sales in Ontario; sales to other provinces follow the rules there

29 days

If you exceed $30,000 in a single quarter, register within 29 days

First: how the $30,000 is counted

The $30,000 small supplier threshold is based on the combined worldwide taxable sales of the company and all its associates (including the foreign parent company and its other subsidiaries). Zero-rated export sales count too; items excluded by law, such as financial services and sales of capital property, do not. If the parent company itself sells several million dollars a year, the Canadian subsidiary may not be a small supplier from day one.

But "not a small supplier" doesn't mean you start charging tax right away. Look at it in three steps:

1
Small supplier status
Do worldwide taxable sales, combined with associates, exceed $30,000?
2
Registration and timing
Does the company carry on business in Canada and make taxable sales?
3
What tax to charge
Depends on the nature and place of supply of each sale; zero-rated sales are charged 0%

When you must register

There are two ways to measure the combined total; whichever is met first applies:

Over $30,000 in a single quarter
You must charge HST on the sale that takes you over; you count as a registrant from that day and must complete registration within 29 days.
Over $30,000 across four consecutive quarters
Where no single quarter goes over. Example: if the four quarters ending March 31 total more than $30,000, you are still a small supplier until the end of April and stop being one on May 1; you generally start charging tax from the first taxable sale after that and must complete registration within 29 days.

If you go over and don't register, the CRA will still make you pay the HST you should have charged your customers — and often the company ends up paying it out of its own pocket.

Under $30,000: should you register anyway?

Item	Don't register yet	Register from the start
HST paid at the start	HST on services already used up generally can't be recovered	Where eligible, it can be recovered as input tax credits
Selling to businesses	No HST charged	HST charged; if the customer can claim it in full, there's little effect on your price
Selling to consumers	No tax added, so your prices are more competitive	You charge an extra 13%
Exporting abroad	Nothing charged	Generally zero-rated, and you still recover input tax credits
Filing	No returns to file	Returns filed each period, generally once a year or more often

A simple example. A new company opens in Ontario. In its first year it spends $100,000 in total on renovations, equipment, and legal and accounting fees, and pays $13,000 in HST. Assuming all of these costs are incurred while the registration is in effect, are used in taxable commercial activities, are backed by complete invoices and are not subject to any other restriction on claiming, the $13,000 can generally be recovered. If the company isn't registered, it is simply a cost. For inventory and equipment bought before registration and still on hand, you can generally claim under the rules after you register; services already used up (such as legal fees before registration) generally can't be recovered.

So: first confirm, on the combined basis, whether you have to register anyway. If you don't have to, companies that sell to businesses (B2B), export, or have large start-up costs usually find it worth considering registering from the start. Those that sell mainly to individuals and have modest sales can run the numbers first and then decide.

If you register voluntarily, the effective date is generally the day you apply (it can be backdated by up to 30 days), and you usually have to stay registered for at least one year before you can cancel.

Filing after you register

Annual taxable sales	Reporting period	When to file and pay
$1.5 million or less	Annual (you can elect quarterly or monthly)	Annual filers: within 3 months after the fiscal year-end
More than $1.5 million, up to $6 million	Quarterly (you can elect monthly)	Within 1 month after the end of each period
More than $6 million	Monthly	Within 1 month after the end of each period

The "annual taxable sales" in the table above is the measure that sets your filing frequency. It generally looks at the taxable sales in Canada of the company and its associates, which is not the same thing as the worldwide total used for the small supplier test above.

Most businesses now have to file online. If you file annually and your net GST/HST for the previous fiscal year was $3,000 or more, you may have to pay quarterly instalments in the current fiscal year. Instalments can also be calculated under the applicable rules based on the estimated net tax for the current year; if you expect the current year's net tax to be less than $3,000, whether you are exempt from instalments and how to calculate them should be determined under the CRA's rules. If your first fiscal year was shorter than 12 months (for example, the year you registered), first convert that period's net tax to a full-year figure (divide it by the number of days you were registered, then multiply by 365) and compare that with $3,000, rather than using the actual amount for the period; if the result is $3,000 or more and your net tax for the second year will also be $3,000 or more, you have to pay quarterly instalments in the second year.

Points to watch

HST you collect isn't the company's money
You collect it on the government's behalf, so don't use it as working capital. If it isn't remitted, directors can, in certain circumstances, be personally liable.
Not everything can be claimed
HST paid on costs used in exempt activities (such as residential rentals and financial services) can't be recovered.
BC is different
BC charges GST (5%) and provincial sales tax (PST, 7%) separately. PST requires a separate registration with the BC Ministry of Finance, and it generally can't be recovered the way HST can.
Invoices must meet the requirements
To claim input tax credits, your suppliers' invoices must show their GST/HST number and other required information, and the tax must be recorded separately in your books.

How Sheng Qian CPA can help

We run the numbers before you register
We look at whether your business is B2B or B2C, whether you export and how much you are spending up front, to decide whether to register from the start.
Opened along with incorporation
Incorporate through EasyU Incorporation (Express incorporation available) and apply for the HST account at the same time; we check your start-up expenses invoice by invoice and claim eligible input tax credits each period.
Bookkeeping and filing together
Bookkeeping on the EasyU platform, reviewed by a CPA, with input tax credits recorded separately and returns filed each period (for prices, see What Sheng Qian CPA Can Do for Foreign Companies in this series).

Sources

Excise Tax Act: Excise Tax Act s. 240, mandatory registration · CRA: GST/HST instalments · Calculating instalments and a short first reporting period
CRA: Small suppliers · When to register and start charging
CRA: Register for a GST/HST account · General Information for GST/HST Registrants (RC4022) · Reporting requirements and deadlines

Disclaimer

This article is general information only and is not tax advice. Every company's situation is different; please consult a CPA about your specific arrangements. Service fees are as set out in our written quote.

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