GST/HST Registration and Compliance for Corporations

Introduction
Understanding GST/HST registration and compliance for corporations is essential for any company operating in Canada. Corporations must determine when to register, how to charge GST/HST, how to file returns, and how to claim input tax credits (ITCs). Mistakes in GST/HST compliance can lead to penalties, interest, audits and financial loss. Many corporations wait too long to register or misinterpret the small supplier threshold Canada rules, exposing themselves to liability. Québec corporations must also comply with QST registration and reporting rules, which operate in parallel but with separate administrative requirements. This guide provides a full breakdown of GST/HST registration and compliance for corporations, helping businesses properly handle sales tax obligations and avoid CRA reviews.

Legal and Regulatory Framework
GST/HST registration and compliance for corporations fall under the Excise Tax Act and provincial legislation for harmonized provinces. The GST/HST is a value-added tax applied on the supply of most goods and services in Canada. Corporations must register for GST/HST when:

• they exceed the $30,000 small supplier threshold Canada in the last four consecutive calendar quarters, or
• they expect to exceed $30,000 in a single quarter, or
• they provide taxable rideshare, taxi, or commercial activity regardless of income, or
• they operate as a non-resident carrying on business in Canada (special rules apply)

Once registered, corporations must charge GST/HST on taxable supplies, collect the tax, remit it to the CRA, and file GST returns. Corporations may claim input tax credits (ITCs) to recover GST/HST paid on business expenses.

Québec requires separate QST registration under Revenu Québec’s system. QST rules closely mirror GST but have distinct filing deadlines and administrative requirements. Understanding GST/HST registration and compliance for corporations means managing both federal and Québec requirements accurately.

Key Court Decisions
Courts in Canada have issued numerous decisions that influence GST/HST registration and compliance for corporations. Key cases clarified:

• what constitutes “carrying on business” in Canada for non-residents
• whether certain supplies are taxable, zero-rated or exempt
• classification of mixed supplies and bundled services
• disputes involving improper ITC claims due to inadequate documentation
• whether corporations intentionally or unintentionally avoided registration

In one landmark case, a corporation argued it was below the small supplier threshold Canada, but CRA proved the business exceeded limits due to unreported deposits. Courts upheld CRA’s assessment. Québec courts also ruled on improper QST claims and emphasized strict documentation standards for ITCs. These decisions show why corporations must understand GST/HST registration and compliance for corporations clearly.

Why CRA Targets This Issue
The CRA monitors GST/HST registration and compliance for corporations closely because sales tax makes up a major portion of government revenue. Common red flags include:

• failing to register once surpassing the $30,000 threshold
• charging GST/HST without being registered
• claiming excessive or unsupported input tax credits
• mismatches between GST returns and corporate income tax returns
• repeated late filings or non-filings
• incorrect application of GST/HST on exempt or zero-rated supplies
• discrepancies between revenue on GST returns and QST returns in Québec

CRA and Revenu Québec auditors examine bank statements, invoices, contracts, and accounting records to verify compliance. Because errors in GST/HST registration and compliance for corporations often lead to reassessment, the CRA enforces these rules strictly.

Mackisen Strategy
Mackisen CPA provides a complete, proactive approach to GST/HST registration and compliance for corporations. Our method includes:

• determining when a corporation must register based on revenue analysis
• registering corporations for GST/HST and QST on time
• setting up proper accounting systems to track taxable supplies and ITCs
• training clients on how to apply GST/HST correctly on invoices
• reconciling GST returns with financial statements
• reviewing QST obligations for Québec-based corporations
• handling voluntary disclosures for late or missed GST/QST registration
• managing CRA or Revenu Québec GST audits
• identifying opportunities to improve cash flow using filing frequency optimization

By ensuring complete compliance, we help corporations avoid penalties and interest while maximizing recoverable ITCs.

Real Client Experience
Many corporations come to Mackisen after encountering problems with GST/HST registration and compliance for corporations. One client exceeded the small supplier threshold Canada but failed to register for more than a year. CRA assessed backdated GST and interest. Mackisen filed a voluntary disclosure package, significantly reducing penalties.

Another client charged GST without being registered. We corrected past invoices, recalculated remittances, and restored compliance. A Québec corporation claimed ITCs without supporting invoices. Revenu Québec denied credits. Mackisen rebuilt documentation and reversed part of the assessment.

A professional services firm incorrectly categorized exempt and taxable services, causing inconsistent returns. We restructured their billing and corrected filings. Another client had registered but never filed returns. CRA issued estimated assessments. Mackisen filed accurate returns and negotiated payment arrangements. These cases show why understanding GST/HST registration and compliance for corporations is critical.

Common Questions
Corporations frequently ask whether they must register for GST/HST if they earn under $30,000. They do not—unless they operate rideshare/taxi services or voluntarily register. Another question is whether ITCs can be claimed immediately. ITCs are claimable only when proper documentation exists and expenses are business-related.

Québec clients ask whether QST registration is automatic. It is not; QST requires its own registration. Companies also ask how filing frequencies are determined. Filing can be annual, quarterly or monthly depending on revenue.

Understanding these questions helps corporations manage GST/HST registration and compliance for corporations confidently.

Why Mackisen
With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses stay compliant while recovering the taxes they’re entitled to. Whether you’re filing your first GST/QST return or optimizing multi-year refunds, our expert team ensures precision, transparency and protection from audit risk. When handling GST/HST registration and compliance for corporations, Mackisen provides complete setup, filing support, ITC optimization and professional representation in case of CRA or Revenu Québec reviews.