Vat Registration

Canadian GST, PST, HST, QST

Canada operates a range of Goods & Services Tax (GST) across the Federal and 13 Provinces.  The rules for GST broadly follow the European Union and OECD VAT models.

GST was introduced into Canada in 1991.  Federal GST is levied by the Canadian Revenue Agency, and the tax code is contained within the Excise Acts. Although Quebec’s GST is under the control of the local Revenue Quebec.   Some Provinces also operate a separate Provincial Sales Tax (PST).  This includes British Columbia, Manitoba and Saskatchewan.  These taxes are combined with State GST on taxable sales, with GST calculated on the cost plus PST.

Quebec’s Provincial Tax is known as Quebec Sales Tax (QST).


Should you register for Canadian GST

Foreign businesses providing taxable goods or supplies may register for GST as a non-resident where:

sales of taxable supplies are above CAD30,000 in any calendar quarter, with a time limit for registration of 30 days

below this limited companies can voluntarily register

if the acquire goods in Canada attracting GST so that they reclaim the tax back

GST registration required an application to the Canadian Revenue Agency, who will issue a Business Number once they have received an application and supporting Certificate of Incorporation.  The Agency will also require a bank guarantee or insurance policy to the value of 50% of the anticipated annual sales.  There is a possibility to waive this obligation for companies trading less than CSD100,000 per annum.

There is no obligation to appoint a tax fiscal representative or tax agent if you are a non-resident trader.  There is no provision for Group GST registrations, although applications can be made between companies which are 90%+ voting shares controlled to have inter-company transaction treated as zero-rated.

Advantages of registering

GST and HST that you pay can be refunded if you are registered to collect the GST/HST. These are called input tax credits, and they originate with most expenses, costs of goods later sold or services you used in the process of conducting business. Charities have a special procedure under which 40 percent of the GST/HST collected is kept by the charity, but fewer input tax credits can be claimed. Small suppliers in general business or charities and public services can still register to collect the GST/HST to enable the claiming of input tax credits.


References & Resources

Canada Revenue Agency: Basic Information on the GST/HST

Canada Revenue Agency: Small Supplier Limit Calculation

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