When to Register for a GST Number (and What Happens If You’re Late)

If you’ve started a side hustle, freelance gig, or small incorporated business, congratulations – you’re officially a Canadian entrepreneur. Now comes the fun part: taxes.

One of the most overlooked (and occasionally painful) tax obligations is registering for a GST/HST number.

So, when do you need to register? What happens if you didn’t realise you were supposed to? And will the CRA send a helicopter to your house if you’re late?

Let’s unpack it, without the jargon or government gobbledygook.

When You Must Register for GST/HST

According to section 240(1) of the Excise Tax Act, you must register when:

• Your taxable revenues exceed $30,000 in a single calendar quarter, or

• You cross $30,000 over four consecutive calendar quarters (on a rolling basis)

Taxable revenues include:

• Sales of goods and services (even if you’re self-employed)

• Commercial rental income, including short-term rentals (STRs) like Airbnb

• Consulting income, digital products, landscaping, etc.

  
  

Important: Long-term residential rental income (30+ day leases) is GST/HST exempt, but short-term rentals are treated as taxable commercial activity, even if you’re renting out a house or condo.

Who Needs to Register?

• Sole proprietors (freelancers, STR hosts, consultants, tradespeople)

• Corporations (even if it’s just you and a laptop)

• Partnerships and trusts

  
  

Tip: If you operate multiple small businesses, CRA may combine your revenues when calculating the $30K threshold. (See CRA Policy P-244 on associated persons.)

What Is the “Small Supplier” Rule?

If you earn less than $30,000 in taxable revenue over the past four quarters, you’re considered a small supplier, and you don’t need to register (yet).

So why would anyone register early?

• You can claim back the GST/HST on your expenses (Input Tax Credits)

• It makes you look more legitimate to customers and suppliers

• It saves you from the hassle of retroactive registration later

  
  

Once you voluntarily register, you’re committed – you must start collecting and remitting GST/HST even if you’re still under the $30K threshold.

What Happens If You’re Late?

Let’s say you quietly coasted past $30,000 without registering. What now?

Cue the dramatic music… but don’t panic. Here’s what CRA might do:

• Register you retroactively to the date you crossed the threshold

• Require you to remit GST/HST on past revenue, even if you never collected it

• Charge interest and penalties for failing to register and remit

  
  

Translation: You might have to pay GST out of your own pocket. Ouch.

Example

You earned $33,000 from Airbnb by July but only registered in October. CRA could say:

• You should’ve registered by 1 August

• You owe us GST/HST on everything from 1 August onward

• Here’s your bill, with interest

  
  

How to Fix a Late Registration (Without Losing Sleep)

1. Register immediately – don’t wait for a CRA letter

2. Request a retroactive effective date

3. Send GST-inclusive invoices (or absorb the cost yourself)

4. Use CRA’s Voluntary Disclosures Programme (VDP). If CRA hasn’t contacted you yet, the VDP (IC00-1R6) might reduce penalties and interest

   
   

The VDP is only available before CRA comes knocking.

What If I Never Register?

CRA has AI, algorithms, and – let’s face it – very thorough reviewers.

If you’re reporting business or STR income on your T1 or T2 returns, and CRA sees that you should be charging GST/HST, here’s what happens:

• You’ll owe all uncollected GST/HST

• You’ll lose your Input Tax Credits

• You could face gross negligence penalties up to 50% under section 285 of the ETA

• And yes, there’s also a $250 fine under section 238(1) for failure to register

  
  

How to Register for GST/HST

• Online via CRA My Business Account

• By phone at 1-800-959-5525

• Through your accountant (we do this all the time)

  
  

You’ll receive a 9-digit Business Number plus a suffix like RT0001.

Once registered, CRA assigns you a filing frequency (monthly, quarterly, or annually). If your net GST exceeds $3,000 annually, even annual filers must make quarterly instalments.

Final Thoughts (Quick Recap)

• You must register if your taxable revenue exceeds $30,000 over a quarter or four rolling quarters

• Residential rent is exempt, but short-term rentals are taxable

• Late registration = retroactive GST + interest + penalties

• Voluntary registration can be strategic

• CRA cross-references your filings – you won’t slip through forever

  
  

Don’t guess. Talk to a tax pro (like us). Better a 20-minute chat than a $20,000 CRA surprise.

Think you might have missed the GST registration mark?

Schedule a complimentary consultation with Anker RETax today, and we’ll help you clean it up before the CRA comes calling.

Complimentary Consultation Call

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