Many Canadian business owners assume their GST/HST filing frequency is determined on a company-by-company basis. However, this assumption could lead to a costly GST/HST error in the form of GST/HST penalties and/or interest.
For GST/HST purposes, filing frequency is based on the total taxable supplies made within the associated group of companies, not individual corporations. If your business operates through multiple entities or has grown over time, your current GST/HST filing frequency may no longer be correct.
How GST/HST Filing and Payment Frequency Is Determined
The CRA assigns GST/HST reporting periods based on revenue thresholds. Filing and payment deadlines are tied directly to those reporting periods.
If annual taxable supplies are:
- $1.5 million or less, the assigned GST/HST reporting period is annual;
- if they are more than $1.5 million and up to $6 million, the reporting period is quarterly;
- and if they exceed $6 million, the reporting period is monthly.
Monthly and quarterly filers must file and pay one month after the end of the reporting period.
Even where an annual reporting period applies, quarterly instalment payments are required if net tax for the fiscal year is $3,000 or more, (with an exception for special rules for the first fiscal year).
Assigned reporting period and deadlines can be viewed in your CRA account.
How Associated Entities or Groups Are Evaluated
When corporations are associated, their taxable supplies are combined to determine whether the group must file annually, quarterly, or monthly.
This commonly affects businesses that:
- Operate through holding companies and operating companies
- Have completed acquisitions, reorganizations, or estate freezes
- Have experienced sustained revenue growth in one entity
- Have not reviewed their GST/HST setup in several years
A corporation with little or no activity can still be required to file more frequently if it is associated with a higher-revenue company.
Mandatory Electronic GST/HST Filing Is Now Required
For reporting periods ending in 2024 and later, electronic filing is mandatory for almost all GST/HST registrants. Paper-filed GST/HST returns are subject to penalties.
A Practical Next Step
If your business operates through multiple corporations, or if your revenue profile has changed, now is the right time to understand your GST/HST filing requirements. For more information regarding GST/HST for businesses, visit this CRA website.
At Bateman MacKay LLP, we regularly review GST/HST structures as part of broader tax and corporate planning. Such a review ensures filing frequencies reflect the current reality of the business, not outdated assumptions.
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