The Goods and Services Tax (GST) and Harmonized Sales Tax (HST) are consumption taxes levied on most goods and services in Canada. Understanding the payment dates for GST/HST is crucial for businesses to meet their tax obligations and avoid penalties.

Your Corporate Tax Accountant in Toronto can also help but let us educate you with the basics.

What is GST/HST?

The Goods and Services Tax (GST) is a federal tax levied on most goods and services sold in Canada. The Harmonized Sales Tax (HST) combines the federal GST with provincial sales tax, resulting in a single tax rate in participating provinces. HST applies to goods and services in Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.

GST/HST Registration

Businesses with annual revenues exceeding $30,000 must register for GST/HST with the Canada Revenue Agency (CRA). Once registered, businesses collect GST/HST on taxable supplies and remit the tax to the CRA.

GST/HST Payment Dates

GST/HST payments are typically due quarterly, monthly, or annually, depending on the business’s annual taxable supplies. Here is what you need to know about GST/HST payment dates in Canada:

Quarterly Filing

Businesses with annual taxable supplies under $1.5 million can choose to file their GST/HST returns quarterly. Quarterly filing deadlines are one month after the end of each fiscal quarter.

If you have GST/HST filing every quarter, then GST/HST filing, and payment are due the following month. (for example, October 01, 2023 – December 31, 2023, is the filing period, then payment, and the filing due date is January 31, 2024).

Monthly Filing

Businesses with annual taxable supplies exceeding $1.5 million must file their GST/HST returns monthly. Monthly filing deadlines are one month after the end of each reporting period.

If you have GST/HST filing every month, then GST/HST filing, and payment are due the following month. (for example, September 01, 2023 – September 30, 2023, is the filing period, then payment, and the filing due date is October 31, 2023).

Annual Filing

Some small businesses with annual taxable supplies under $500,000 may qualify for annual GST/HST filing. Annual filers must file their GST/HST returns within three months after the end of their fiscal year.

If you have yearly GST/HST, you have three months to file and pay it (for example, January 1, 2023 – December 31, 2023, is the GST/HST filing period. The payment file due date will be March 31, 2024).

Important Considerations

Electronic Filing

The CRA encourages businesses to file their GST/HST returns electronically using the GST/HST Netfile system. Electronic filing is convenient, secure, and ensures timely processing of returns and payments.

Payment Methods

Businesses can remit their GST/HST payments to the CRA through various methods, including online banking, pre-authorized debit, credit card, or by mail using a GST/HST remittance voucher.

Input Tax Credits (ITCs)

Businesses can claim Input Tax Credits (ITCs) to recover GST/HST paid on business expenses. Claiming ITCs reduces the net amount of GST/HST owed to the CRA. Your Corporate Tax Accountant Toronto can help you with this.

Late Filing Penalties

Failing to file GST/HST returns or remit payments by the due date can result in penalties and interest charges. Penalties for late filing or payment can range from 1% to 6% of the outstanding balance, depending on the number of times a business has been penalized in the past.

Voluntary Disclosures

Businesses that have made errors or omissions in their GST/HST filings can make voluntary disclosures to correct their tax affairs. Voluntary disclosures may qualify for relief from penalties and interest if certain conditions are met.

Conclusion

Understanding GST/HST payment dates is essential for businesses to meet their tax obligations and maintain compliance with Canada’s tax laws. By adhering to filing deadlines, remitting payments on time, and taking advantage of available credits and deductions, businesses can effectively manage their GST/HST obligations and avoid penalties. Staying informed about GST/HST requirements ensures smooth tax administration and contributes to the overall financial health of businesses in Canada. Talk to a Toronto Corporate Tax Accountant for more information.

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