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GST/HST - Small Supplier

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Sales Taxes ->GST/HST -> GST or HST small supplier

GST/HST - Small Supplier

Excise Tax Act s. 148

In most cases, a small supplier is not required to register to collect GST/HST.  There are exceptions - see below.

A small supplier is a supplier whose worldwide annual GST/HST taxable supplies, including zero-rated supplies and including the supplies (sales) of all associates, are less than $30,000, or less than $50,000 for public service bodies (colleges, non-profit organizations, charities, hospitals).  However, the calculation of annual revenue is not just done on a calendar year basis.  At the end of each calendar quarter (March 31, June 30, September 30, and December 31), total taxable supplies for the past 4 consecutive quarters (i.e., for the past 12 months) should be totalled.  If this total exceeds $30,000, the business must register to start collecting GST.  Note that the taxable supplies will include sales as well as expenses incurred on behalf of the customer and rebilled to the customer.

Small Supplier Calculation Example

Here is an example of a small supplier's quarterly sales, showing when the small supplier is no longer a small supplier, and must register to collect GST or HST.  This supplier started business in January 2009.

Quarter Quarterly
Sales
Jan-Mar 2009 $3,500
Apr-Jun 2009 15,000
Jul-Sep 2009 31,000

In the above example, the sale that caused the supplier to exceed the $30,000 limit occurred on Jul 22, 2010, and the limit was exceeded all in one quarter, so:

bulletthe supplier ceases immediately to be a small supplier with the sale that caused the $30,000 limit to be exceeded.
bulletthe supplier must charge GST or HST on the sale that causes the limit to be exceeded, even though they are not yet registered to collect GST or HST.
bulletthe supplier must register to collect GST or HST within 29 days after the date of the sale which caused the limit to be exceeded, so in this case by Aug 19, 2011.

This next example shows a slightly different situation.

Quarter Sales Annual
Sales
Jan-Mar 2009 $3,500  
Apr-Jun 2009 6,500  
Jul-Sep 2009 7,000  
Oct-Dec 2009 8,000 $25,000
Jan-Mar 2010 8,000 29,500
Apr-Jun 2010 9,000 32,000

In the above example, the sale that caused the supplier to exceed the $30,000 limit occurred on Jun 22, 2010, and the limit was exceeded over 4 quarters, not in a single quarter as in the first example, so:

bulletthe supplier ceases  to be a small supplier at the end of the month following the quarter in which the $30,000 limit was exceeded, so at the end of Jul 2010.
bulletthe supplier must charge GST or HST beginning in Aug 2010.
bulletthe supplier must register to collect GST or HST within 29 days after a sale is made other than as a small supplier.

Tax Tip:  Always keep track of your annual sales so you can predict when you will have to register.

Small Suppliers Who Must Register for GST/HST

A small supplier must register to collect GST or HST if they carry on a taxi business, according to s. 240(1.1) of the Excise Tax Act of Canada.  This would also include Uber taxi drivers.  The same is true of QST in Quebec. Also, according to s. 240 (2), any person "who enters Canada for the purpose of making taxable supplies of admissions in respect of a place of amusement, a seminar, an activity or an event is required to be registered" to collect GST.

The 2017 Federal Budget proposes to amend the definition of a taxi business to require providers of ride-sharing services to register for the GST/HST and charge tax on their fares in the same manner as taxi operators.  This will be effective as of July 1, 2017

Small Supplier Voluntary Registration

A small supplier can choose to voluntarily register to collect GST/HST, in order to recover the GST/HST they have paid, by claiming input tax credits.  See our information on voluntary registrations.

Canada Revenue Agency Resources:

Small Supplier Limit Calculation

RC4022 General Information for GST/HST Registrants - Small Supplier

Revised: March 22, 2017

 

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