How to File a GST Return in Canada

If you do business in Canada, Canada Revenue Agency (CRA) requires you to do GST or HST returns. Luckily, the process is fairly straightforward, and you can usually file online.

What Are GST and HST?

GST stands for “goods and service tax.” It’s a federal sales tax charged on most goods and services. Canada charges GST, but the U.K., Spain, Italy, Australia, India, South Korea and Brazil also use GST sales tax systems. In Canada, GST is a flat rate, so it’s the same in every province. Although the rate is fairly stable, it does occasionally change. You can check the current GST rate on the CRA’s website. There are a few goods and services that are exempt from GST, such as basic foods, livestock, medical supplies, feminine hygiene products, prescription drugs, child care services and some kinds of property. A full list of exemptions is available on the CRA website. Some provinces have harmonized GST and provincial sales tax (PST), including Ontario, New Brunswick and Nova Scotia. In these provinces, harmonized sales tax (HST) has replaced GST.

Register for a GST or HST Account

Before you can file a GST or HST return, you need to register for an account. By doing so, you’ll receive a GST number and can start filing your returns. All companies and individuals who sell products and services in Canada need to pay GST or HST, but there are exceptions for small suppliers and businesses that sell things that are exempt from the tax. The CRA website outlines the full details of who qualifies for these exemptions. If you’re a resident of Canada, you can register through the “Business Registration Online” service on the CRA website or by filling out Form RC1. If you’re not a resident of Canada, you can only register by sending in Form RC1.

Use the Form to Calculate Your Net GST

You should always charge the sales tax on all of your invoices and keep the money handy to make your GST payments. Once you have registered for GST or HST, you can file electronically online by providing your GST number. To calculate the amount of tax you owe, start by filling out the electronic return provided through CRA. Fill out your total revenue in Line 101 and then use lines 103 to 109 to calculate input tax credits (ITCs) and other adjustments and calculate the total amount of tax you owe. Full instructions for these fields are available on the CRA website.

File the Return

To file the return, complete the rest of the electronic return form and submit it. Depending on the date you want to complete the return and the kind of business you operate, you may be required to file GST or HST monthly, quarterly or annually. Your GST return due date depends on how frequently you need to file your return. Due dates are available on the CRA website.

Make a GST or HST Payment

Once you’ve filed your GST or HST returns, you can make payments. You can use the CRA’s online services to view your balance and make transfers or direct deposits. In some cases, you can also pay in instalments. If you want to pay online, you can use the “My Payment” feature on the CRA website.