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Assigned Reporting Periods for GST/HST Returns

Question:

What are the different assigned reporting periods for goods and services tax (GST) / harmonized sales tax (HST) returns?

Facts:

Generally, a company’s assigned reporting period is based on their annual total revenue from their taxable supplies of property and services made in Canada in their previous fiscal year. However, a company may choose to file more frequently than their assigned reporting period.

Discussion:

Assigned and optional reporting periods

Annual taxable supplies threshold amountsAssigned reporting periodOptional reporting periods
$1,500,000 or lessAnnualMonthly, Quarterly
More than $1,500,000 up to $6,000,000QuarterlyMonthly
More than $6,000,000Monthly-

A company’s assigned reporting period can change if its annual taxable supplies amount increases and crosses into the next reporting threshold. For example, if a company was an annual GST/HST filer and reported on their annual GST/HST return annual taxable supplies of $1,600,000, they would then become a quarterly GST/HST filer. However, if the company’s annual taxable supplies amount dropped below $1,500,000, it would remain a quarterly GST/HST filer. The company does not automatically become an annual filer again.

Companies can file Form GST20 Election for GST/HST Reporting Period to change the reporting period of their GST/HST return (to decrease or increase their reporting periods) if they are eligible to do so.

Some companies that qualify for annual reporting may choose to report more frequently (quarterly or monthly). There are several reasons why a company may do this, such as:

  • Generally, when a company imports their product into Canada, its products are subject to 5% GST on import. When a company sells the product, it will collect the GST/HST from its customer on the sale. Collecting the GST/HST from customers will offset the GST they paid on imports. If a company imports a large quantity of inventory into Canada, the inventory may sit for several months before being sold. By filing quarterly or monthly, they will get the GST paid on import in a refund rather than having to wait to collect it when the product is sold to a customer.
  • If a company is an annual filer and owed more than $3,000 in net GST/HST on its previous GST/HST return, it may be required to make quarterly instalments. However, some companies only have a few large sales during the end of the year. This means companies would have to send three instalment payments for the GST/HST even before it was charged to the customer. To avoid sending in instalments, the company could elect to file quarterly GST/HST returns and report Nil GST/HST returns for the first three quarters. Then when the sale occurs in the fourth quarter, the GST/HST is reported and paid.
Filing and remitting due dates

Reporting periodDue date
Monthly, QuarterlyNo later than one month after the end of your reporting period
AnnualNo later than three months after the end of your reporting period

Penalties and interest may be charged if there is a balance owing and the filing and remitting due date is not met.


If you would like more information on this topic, please contact a member of the EPR tax team by completing the contact form below. Our tax experts can advise on the best structure to reduce or minimize the impact of the taxes.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. EPR Maple Ridge Langley, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.


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