As a Canadian business owner, your journey is anything but static. Your business evolves, grows, and may even take a temporary pause. When these changes occur, it’s essential to ensure your GST/HST account with the Canada Revenue Agency (CRA) stays up to date.
Keeping your CRA information accurate helps you avoid filing errors, ensures you receive important notices, and makes managing your taxes easier and more efficient.
This guide covers the key areas where you may need to update or change your GST/HST account information, along with optional CRA settings that can help streamline your tax reporting and compliance. Think of it as your practical roadmap for staying on top of your obligations and optimizing your business tax setup as you grow.
Common Reasons to Update Your GST/HST Account Information
Life happens, and so do business changes! It’s vital to inform the CRA promptly about any updates to your core GST/HST account information. This ensures you receive important correspondence and that your records are accurate.
Common changes include:
- Address Change: Whether it’s your business address or mailing address, keeping this updated is fundamental.
- Operating Name Change: If your business rebrands or changes its operating name, notify the CRA.
- Temporarily Stopping Business Operations: If you’re taking a break, informing the CRA can help manage your filing obligations during that period.
- Other Changes: Any other significant shifts in your business structure or primary contact information should also be updated.
How to Update: Most of these changes can be conveniently made online through My Business Account or by contacting the CRA directly.
Optional GST HST Account Settings to Optimize Reporting
Beyond basic information updates, the CRA offers several options that can significantly streamline how you manage your GST/HST remittances and filings. Understanding these can lead to greater flexibility and better cash flow management.
1. Change Your GST HST Fiscal Year
Your GST/HST fiscal year is typically aligned with your income tax year, but you have options if a different setup better suits your business.
- Using a Calendar Fiscal Year: If your income tax year isn’t a calendar year (January 1 – December 31), you may elect to use a calendar fiscal year for GST/HST purposes.
- Using a Non-Calendar Fiscal Year: Self-employed individuals and trusts can elect to use a non-calendar fiscal year for GST/HST if it aligns with their income tax fiscal period.
- Changing a Previously Chosen Fiscal Year: If your business needs evolve, you can change your existing GST/HST fiscal year.
How to Change: If you qualify, you can make these changes online via My Business Account. Alternatively, you can fill out Form GST70, Election or Revocation of an Election to Change a GST/HST Fiscal Year. (Note: Specific forms like RC7270 apply to Selected Listed Financial Institutions.)
2. Change Your GST/HST Reporting Frequency
Your GST/HST reporting period dictates how frequently you submit your returns to the CRA. This is usually determined by your annual revenue from taxable supplies (goods and services sold in Canada). However, you might have the option to change it for better business management.
Here’s a quick look at the assigned and optional reporting periods:
Calculating Your Total Revenue: Remember to include zero-rated supplies and taxable supplies from all your associates. Do not include supplies made outside Canada, zero-rated exports, zero-rated financial services, exempt supplies, taxable sales of capital real property, or supplies of goodwill.
How to Change: If eligible, you can modify your GST/HST reporting period online through My Business Account, or by submitting Form GST20, Election for GST/HST Reporting Period. (Specific forms like RC7220 apply to Selected Listed Financial Institutions.)
3. Use Custom Accounting Periods
Some businesses operate on internal accounting periods that don’t neatly align with calendar months or quarters. If this is your situation, you can request to use these specific accounting periods for your GST/HST returns.
Important Note: You need CRA approval before the first day of each fiscal year for which these accounting periods will apply.
General Guidelines for Accounting Periods:
- Each fiscal month usually needs to be shorter than 36 days (and generally longer than 27 days, except for the first and last month in a quarter). You can apply for exceptions.
- A fiscal quarter typically has to be shorter than 120 days (and generally longer than 83 days, except for the first and last fiscal quarters in the fiscal year).
How to Apply: Use My Business Account, or send Form GST71, Notification of GST/HST Accounting Periods, or a written request before the beginning of each fiscal year. Remember, you must file a new notification for each fiscal year you wish to use these periods.
4. File Separately for Branches or Divisions
If your Canadian business has multiple locations, diverse activities (e.g., a gas station and a separate car wash), offices in different provinces, or distinct divisions/departments, you might find it beneficial to track your GST/HST accounts separately.
To qualify for separate filing, your branches or divisions must be:
- Separately identified by their location or the nature of their activities.
- Maintain separate records, books of account, and accounting systems.
- Crucially, all branches and divisions must use the same reporting periods as the parent company.
How to Apply or Revoke:
- Most Businesses: As the head office, you can apply for (or revoke) authorization for your branches or divisions to file their own GST/HST returns using Form GST10, Application or Revocation of the Authorization to File Separate GST/HST Returns and Rebate Applications for Branches or Divisions.
- Unincorporated Organizations: Use Form GST32, Application to Deem One Unincorporated Organization to be a Branch of Another Unincorporated Organization.
- Public Service Bodies: Use Form GST31, Application by a Public Service Body to Have Branches or Divisions Treated as Eligible Small Supplier Divisions.
Final Thoughts
While making these adjustments can significantly streamline your Canadian GST/HST compliance, it’s crucial to avoid common pitfalls. Always ensure your internal records perfectly match what you report to the CRA. Discrepancies, especially in claimed Input Tax Credits or reported revenue, can trigger CRA audits. Maintaining meticulous record-keeping and seeking professional accountant guidance for any complex changes will not only keep you compliant but also maximize your tax efficiencies and protect your business’s financial health.
FAQs
- When do I need to register for a GST HST account in Canada?
You must register when your taxable supplies (including those of your associates) exceed $30,000 in a single calendar quarter or over four consecutive quarters. Once you hit that threshold, you have 29 days to register. - Can I volunteer to register for GST HST even if I’m under the threshold?
Absolutely, you can voluntarily register if you expect to deduct input tax credits on purchases. Just be prepared to file returns regularly. - Can I cancel my GST HST account if my business pauses temporarily?
Yes, you can cancel or suspend registration if your taxable revenue will be consistently below the $30,000 threshold over the next year. Inform the CRA to avoid future filing obligations. - How do I re-activate a cancelled GST HST account?
You can re‑register online via CRA My Business Account or complete Form RC1 (Request for Business Number). The CRA may assign the same number if available. - Can I change the business activity listed for my GST HST account?
Yes. Updating your business activity description helps the CRA better categorize your file. This can be done via My Business Account or by writing to CRA. - Do I need a separate GST HST account if I sell in multiple provinces?
No, you typically use one CRA GST account across provinces. However, if you have branches with separate accounting, you may apply to file separately for each one.
