Goods and Services Tax (GST) and Harmonized Sales Tax (HST) compliance is a non-negotiable obligation for most Canadian businesses. As we move into 2025, several updates and common compliance areas deserve your attention.
Registration Thresholds
Businesses with annual taxable supplies exceeding $30,000 are required to register for GST/HST. This threshold applies to most for-profit businesses and many not-for-profits. Once registered, businesses must collect GST/HST on taxable supplies and remit it to the CRA on a regular basis.
- Small suppliers under $30,000 may still choose to voluntarily register
- Taxi and ride-sharing operators must register regardless of revenue
- Non-resident digital service providers face their own registration rules
Digital Economy Rules
Canada's digital economy GST/HST rules, introduced in 2021 and refined since, require non-resident vendors of digital services, short-term accommodation platforms, and distribution platform operators to register and collect GST/HST when supplying to Canadian consumers. These rules continue to be enforced more rigorously in 2025.
Input Tax Credits (ITCs)
Registered businesses can recover GST/HST paid on business purchases through ITCs. Key compliance points include:
- Maintaining adequate documentation — supplier name, date, amount, and GST/HST number
- Understanding the four-year time limit for claiming ITCs
- Applying the correct ITC restrictions for passenger vehicles and meals/entertainment
- Tracking exempt vs. taxable supplies when a business has mixed activities
Filing Frequencies and Deadlines
Filing frequency — annual, quarterly, or monthly — is generally assigned by CRA based on your annual taxable supplies. Missing filing deadlines results in penalties and interest. For annual filers, the return is due three months after your fiscal year-end; for quarterly and monthly filers, returns are due one month after the period end.
Common Audit Triggers
CRA GST/HST audits often focus on:
- Large or unusual ITC claims
- Persistent refund positions
- Discrepancies between income tax and GST/HST returns
- Real estate transactions and self-supply rules
- Inter-company transactions within related groups
Conclusion
Staying compliant with GST/HST obligations protects your business from costly penalties and interest. At RCRCPA Inc, our tax professionals provide GST/HST registration, filing, advisory, and audit support services. Reach out to us to ensure your business is fully compliant in 2025.