Written by: Josh Buchanan, Magnaltus Consulting

Once your business is registered or incorporated with Saskatchewan’s corporate registry, you will automatically be issued a 9-digit federal business number. With this federal business number, you can register for a goods and services tax (GST) account with the Canada Revenue Agency (CRA).

GST accounts can be directly connected to the corporation in the case of corporations, directly connected to the individual in the case of sole proprietorships, or connected to a registered partnership in the case of partnerships. A business’s GST number will be the 9-digit federal business number followed by RT 0001 which stands for Registered Tax.

GST is a federal sales tax in Canada that was initially introduced in 1991 as a 7% sales tax. As of 2025, the GST rate is 5% where it has remained since 2008. GST is considered a “value added tax” which means it is not just charged to the end user of a product or service, but it is charged at each stage of production and distribution.

In Canada, businesses must charge their customers GST on most product sales and services. Some businesses are exempt from having to register and collect GST, such as those providing medical services or long-term residential property rentals. However, most businesses must sign up for an account, charge GST on sales, collect the GST from their customers, and file and remit the GST they have collected to the CRA.

One unique feature of GST that differs from Saskatchewan provincial sales tax (PST) is that GST has Input Tax Credits (ITCs). ITCs allow business owners to claim the GST they have paid for business purchases as credits against the GST that they collected on sales. Rather than having to remit the entire amount of GST collected on sales, GST registrants can apply their ITCs and remit the difference between total GST collected and total ITCs.

Claiming GST expenses as ITCs for businesses is superior to clumping the GST in as part of the business expense. Every dollar spent on GST reduces GST payable by a dollar, whereas clumping it in with other business expenses only reduces taxable income by a dollar, and that taxable income is then subject to the taxation rate of the business.

For example, if a business registers for a GST account, makes $100,000 in taxable sales in a given reporting period and collects 5% GST on sales, they would have collected $5,000 in GST. If they had incurred GST expenses to operate the business such as GST on the rent for their commercial facility, or GST on office supplies and software, then they can claim these as ITCs. If the total ITCs for the reporting period were $1,000, then only $4,000 must be remitted to the CRA, rather than the full $5,000. This is because the $1,000 in GST expenses are applied as ITCs against the total GST collected. If the $1,000 in GST ITCs were simply clumped in with the total business expense for the purchase, it would only result in taxable income being reduced by $1,000, rather than a $1,000 credit being issued.

One important exception that will allow certain businesses to either delay or bypass registering for a GST account is if they meet the criteria of a “small supplier” as defined by the CRA. For most businesses, being a small supplier essentially means that your business does not exceed $30,000 in world-wide taxable supplies (including zero-rated supplies) over four consecutive calendar quarters.

If the business surpasses the revenue thresholds for being a small supplier, the business must register for GST and begin charging, collecting, filing, and remitting GST. The CRA requires businesses who surpass the $30,000 threshold in one single quarter or less to register for GST immediately and collect GST on the supply that brought the business to the $30,000 threshold. For businesses that surpass $30,000 in less than four consecutive calendar quarters, but not within one single calendar quarter, the CRA allows until the end of the month following the quarter in which $30,000 was exceeded to register for GST.

Another important point regarding GST is that the definition of small supplier is based on an individual entity. For example, an individual may register a cleaning business and a separate photography business as sole proprietorships. This individual will only be issued one federal business number and only opens one GST account. In order to determine if the small supplier threshold has been reached, the CRA looks at the total amount of all revenues (before expenses) from worldwide taxable supplies from both businesses.

The same concept applies to a corporation. All revenue from worldwide taxable supplies generated through a corporation are considered when determining whether or not the business is a small supplier. In the case that an individual has a sole proprietorship business and is also the shareholder and operator of a corporation, the two businesses are registered as separate legal entities. In the case that two businesses are registered as distinct legal entities, the calculation for the small supplier threshold does not combine revenues from the two entities.

For businesses that do meet the criteria of a small supplier, it is not necessary to register for a GST account, charge it on sales, or file and remit it to the CRA. However, even businesses that are not required to register may benefit from voluntarily registering for GST. Some of the main benefits of voluntary registration include:

1. Develop habits – if the business is going to grow out of being a small supplier eventually, it may be best just to set up a GST account right from the This will allow customers to get used to paying GST and allow the business to get used to charging, collecting, and remitting from the start, rather than implementing it later on.
2. Input tax credits on startup costs – if a business has high startup costs from items like equipment, furniture, or leasehold improvements, voluntarily signing up for GST early allows you to claim the GST on these purchases as input tax credits. If you spend more GST than you collect in a reporting period, the CRA will issue you a refund cheque.
3. Input tax credits on zero-rated supply – if your business sells zero-rated supplies (a special form of product or service where GST is charged at 0%) such as basic groceries, livestock, or exports, you can still claim GST input tax credits even though you don’t collect GST on sales. This will allow you to receive GST refund cheques.

If you are a self-employed taxi driver or commercial ride sharing driver, you have to register for GST even if you are a small supplier. This is one of the main exceptions to the small supplier rule. Other exceptions exist for businesses such as charities and business entities that are not residents of Canada.

It is important to note that only GST registrants must charge, collect, and remit GST. Additionally, only GST registrants can claim GST ITCs. In the case that businesses are not registered for GST, but are no longer small suppliers, they must register for GST as soon as required by the CRA. Businesses who register later than required should contact the CRA directly to resolve any issues and avoid penalties.

GST may seem complicated and intimidating at first, but it becomes much easier to understand and manage once you have gained some experience working with it. Many small businesses may never need to register for a GST account, collect it, or remit it. Other small businesses that aren’t eligible to be small suppliers may only have to file and remit their GST once per year.

Even larger businesses that have to file GST more frequently can quickly and easily develop habits that make it easy to remain compliant with their GST obligations.

Sources:

General GST information – https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses.html

CRA Small Supplier Information – https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/2-2/small-suppliers.html

CRA Different Types of GST Supply –https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-collect-type-supply.html

Historical GST rates –https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/income-statistics-gst-hst-statistics/gst-hst-st atistics/gst-hst-statistics-tables-2016-2020-calendar-years.html

GST Registration Information –https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/account-register.html

GST Input Tax Credit Information – https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/calculate-prepare-report/input-tax-cred it.html