Understanding GST/HST for Corporations in Canada: Registration, Filing, and Compliance (2025 Guide)

For Canadian corporations, especially small and medium-sized businesses, Goods and Services Tax (GST) or Harmonized Sales Tax (HST) is a crucial part of running a compliant business. While it may seem like just another tax to worry about, understanding when and why to register, how to remit, and how to manage these funds can save your business from unnecessary interest, penalties, and CRA audits.

At Track Accounting Inc., we regularly help corporations navigate GST/HST rules. Here’s everything you need to know to keep your business compliant.

1. When Does a Corporation Need to Register for GST/HST?

Under Canadian tax law, a corporation must register for GST/HST if it meets the Small Supplier Threshold:

• Your taxable revenue exceeds $30,000 in any single calendar quarter OR over four consecutive calendar quarters.


• Taxable revenue includes worldwide sales (not just Canadian), but excludes zero-rated sales (like exports).


• This rule applies even if your profits are low or your customers are mostly individuals.

If you exceed the threshold, you must register immediately. Failing to do so means the CRA can:

• Backdate your registration, requiring you to collect GST/HST retroactively


• Impose interest and penalties on unpaid tax


• Deny your Input Tax Credits (ITCs) until you’re properly registered

2. Why Is GST/HST Registration Important for Corporations?

Even if you haven’t reached $30,000 yet, voluntary registration can benefit you:

1. Claim Input Tax Credits (ITCs): If you incur GST/HST on expenses (like rent, utilities, or supplies), registration allows you to claim those back, reducing your net tax bill.


2. Business Credibility: Many B2B clients expect to see a GST/HST number on invoices. Being registered shows professionalism.


3. Avoid Surprises: Waiting until you cross $30,000 can create headaches if you suddenly owe tax on past sales.

At Track Accounting, we often recommend early registration for startups that incur significant startup costs, even before generating revenue.

3. Filing Frequency: Annual vs. Quarterly (or Monthly)

Once registered, you’ll need to file GST/HST returns. CRA assigns filing frequency based on your revenue, but you can request a different schedule:

• Annual Filing (default for small businesses): If your revenue is under $1.5 million, you can file once a year.
  • Pros: Less administrative work.
  • Cons: Easy to spend collected HST by mistake, leading to a large bill at year-end.


• Quarterly Filing: Recommended for many small corporations.
  • Pros: Forces regular remittance, reducing cashflow shocks.
  • Cons: More frequent filings.


• Monthly Filing (for larger corporations): Typically assigned if annual revenue exceeds $6 million.

Track Accounting Tip: For corporations that struggle with cash flow, quarterly filing often makes the most sense, even if annual is permitted. It spreads payments out and prevents the “big bill” surprise.

4. How to Avoid Late Filing Penalties

Late filing can be costly, even if you don’t owe much. CRA penalties include:

• 1% of the balance owing + 0.25% for each month late (up to 12 months)


• Interest on unpaid balances, compounded daily


• Possible audit triggers for repeated late filings

For example, if your corporation owes $10,000 and is 6 months late: Penalty = $100 (1%) + $150 (0.25% x 6 months) = $250, plus interest (which can easily add hundreds more).

Track Accounting Tip: Always set aside GST/HST collected immediately. Treat it as money you don’t own. Opening a separate HST savings account can prevent accidental spending.

5. Best Practices for Managing GST/HST

To avoid cash flow issues and audits:

1. Segregate Collected Tax: Deposit GST/HST into a separate account weekly or monthly.


2. Use Accounting Software: Programs like QuickBooks Online automatically track GST/HST and ITCs, making filing seamless.


3. Plan for Installments: If your net tax payable is more than $3,000 in a year, CRA may require quarterly installments.


4. File on Time, Even If You Can’t Pay: Filing late carries heavier penalties than just owing tax.


5. Keep Receipts & Records: CRA requires corporations to retain 6 years of records for GST/HST.

6. Should Your Corporation Register Voluntarily?

Even if your revenue is under $30,000:

• You can claim ITCs on startup costs


• You establish credibility with suppliers and clients


• You avoid the stress of backdating registration later

If most of your customers are GST/HST registrants (like other businesses), voluntary registration is almost always worth it because your customers can claim back the tax you charge.

Conclusion: Stay Ahead of GST/HST

GST/HST compliance doesn’t have to be complicated, but ignoring deadlines, failing to plan for cash flow, or misunderstanding your obligations can lead to penalties and audits.

At Track Accounting Inc., we help corporations:

• Register for GST/HST


• Choose the right filing frequency


• Track ITCs and remittances


• File accurately and on time to avoid CRA scrutiny

Need Help With GST/HST?

We handle everything from registration to filing and audits, so you can focus on growing your business.