Definition
A small supplier is a Canadian business whose worldwide taxable sales, together with those of associated businesses, are $30,000 or less over four consecutive calendar quarters. Small suppliers do not have to register for or charge GST/HST. They can register voluntarily to claim input tax credits on business purchases.
Also called: Small supplier exemption, GST/HST registration threshold, $30,000 threshold
Small supplier in practice
The test applies both to any single calendar quarter and to the last four consecutive quarters. Passing $30,000 in a single quarter means you must charge GST/HST from the sale that took you over and register within 29 days. Passing it over four quarters gives you until the end of the following month.
The threshold does not apply to taxi and rideshare drivers or to some non-resident sellers, who must register from their first sale. Quebec applies the same threshold to QST.
A small supplier's invoices should not show GST/HST. Charging tax without being registered is not allowed, and clients cannot claim credits for it.
Example
A Halifax photographer earns $22,000 in her first year, so she is a small supplier and invoices without HST. In her second year a large contract takes her past $30,000 over four quarters, so she registers and starts adding HST.
Frequently Asked Questions
Should I register voluntarily as a small supplier?
If most clients are GST/HST-registered businesses, registering often makes sense: they claim back the tax you charge, and you recover the GST/HST on your own costs. Selling mostly to consumers makes registration less attractive.
Does the $30,000 threshold use revenue or profit?
Revenue. It counts worldwide taxable sales, including zero-rated sales, before expenses, and it includes the sales of associated businesses.
Related terms
- GST GST (goods and services tax) is a broad consumption tax applied to most goods and services, functioning like VAT.
- HST HST (harmonized sales tax) is a single sales tax that combines the 5 percent federal GST with a provincial sales tax in Ontario and the four Atlantic provinces.
- PST PST (provincial sales tax) is a sales tax charged by some Canadian provinces on top of the 5 percent federal GST, in provinces that have not harmonized with it.
- Business number (BN) A business number (BN) is the nine-digit number the Canada Revenue Agency assigns to a business to identify it for federal tax programs.
- Input tax credit An input tax credit is the VAT or GST a registered business paid on its own purchases, which it can deduct from the VAT or GST it collected on its sales.
- Tax exempt A tax-exempt sale is one on which no sales tax, VAT, or GST is charged because the buyer, the product, or the transaction qualifies for an exemption.
This page is for general information only and is not legal, tax, or financial advice. Rules change and vary by location, so consult a qualified lawyer or accountant about your situation.