Do you need to register for HST?

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Now that Tax season is over we thought this post from last year was fitting. It’s a question we still get often so we wanted to share and hopefully this answers any questions you may have.

Have you registered for HST? This is a very common question for startups in Ontario. As soon as you are about to reach $30,000 in gross worldwide sales at any point during a year you need to register for HST. It may be beneficial to voluntarily register for HST if you are going to pay out more HST than what you are going to collect from your customers as you would be entitled to a refund. You can either call CRA or register online through My Account.

The only con to early registration is the preparation of the HST return which can take some time if you are not experienced. You will have the option of filing annually, quarterly or monthly. As well, you will be allowed to report up to a month before you officially registered for HST in most circumstances. If you are not comfortable completing the return you should consider having an accountant prepare it.

If you did not register for HST when you should have registered, CRA has their ways of monitoring your other tax filings to see if it may be applicable to you. For example, the obvious test is examining the statement of income on either the personal tax return or corporate tax return. They can even match your slips to see if there is an outlier. Another way they can figure this out is via shared information with foreign tax authorities. If you are working remotely for a US company under contract and are not receiving a W-2 you are considered self-employed and will need an HST number if your income from them is over the threshold.

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