How to Pay the GST/HST for a Canadian Small Business
The GST/HST your small business collects on sales needs to be remitted to the Canada Revenue Agency (minus the Input Tax Credits (ITCs) you receive credit for on your GST/HST return). Even when you use GST Netfile to file your GST/HST return online if the result of your filing is a balance owing, you'll still have to pay the GST/HST your small business owes in one of these four ways:
How to Pay GST/HST Your Small Business Owes
- Pay electronically using the Canada Revenue Agency's (CRA's) My Payment electronic payment service. This service uses Interac Online to allow individuals and businesses to make payments directly to the CRA from their online banking account. (Note that not all financial institutions have Interac Online.)
- Use your bank or credit union's internet or telephone banking services to pay your GST.
- By Pre-authorized debit: You can authorize the Canada Revenue Agency (CRA) to debit a GST/HST payment amount from your bank account on a specified date. Pre-authorized debit payments can be set up using the CRA My Business Account service.
- Pay in person at your financial institution using form RC158, GST/HST Netfile/Telefile Remittance Voucher.
- By mail: Complete the personalized GST Return the CRA has mailed to you and mail the form's remittance voucher with a cheque or money order made payable to the Receiver General to the address on the back of the voucher, being sure to write your 15 character business number on the back of the cheque or money order.
If you have not received your personalized GST Return, you can request form GST62: Goods and Services Tax/Harmonized Sales Tax Return (Non-Personalized) by calling the Canada Revenue Agency's Forms and Publications Call Centre at 1-800-959-2221.
*GST/HST Payments of $50,000 or more must be made electronically or at a financial institution.
Online Filing of GST/HST
As of July 1, 2010, certain businesses must file their GST/HST returns electronically:
"GST/HST registrants with greater than $1.5 million in annual taxable supplies (except for charities); or all registrants required to recapture input tax credits for the provincial portion of the HST on certain inputs in Ontario or British Columbia; or builders affected by the transitional housing measures announced by Ontario or British Columbia" (Canada Revenue Agency News Release).
Electronic Filing (Such as GST/HST) Is Encouraged
All GST/HST registrants are encouraged to use electronic GST/HST return filing methods. The Canada Revenue Agency offers a variety of options, which are available to all eligible GST/HST registrants, except for those in Quebec:
- GST Netfile: With GST Netfile, you complete your GST/HST return online and send it to the Canada Revenue Agency directly via the internet. (Note: using GST Netfile requires an access code; you should receive it in the mail from the Canada Revenue Agency. GST/HST Netfile is available to all GST/HST registrants, except for those in Quebec. To pay any GST/HST owing when you use Netfile, you will need to pay using one of the four methods outlined above.
- GST/HST Telefile: You may use a touch touch-tone, call 1-800-959-2038 and proceed as instructed to file your GST/HST return. If you do this, you will need to pay the GST/HST owing (if there is any) by mail, through your financial institution, or electronically using the Canada Revenue Agency's My Payment electronic payment service.
- Electronic Data Exchange (EDI): Electronic Data Exchange (EDI) uses a computer-to-computer exchange of information in a standard format to file and pay your GST/HST return. After registering with a provider (such as a financial institution), you supply GST/HST return and payment information via computer or phone which is then converted to the appropriate GST/HST return format and transmitted to the CRA.
- GST HST Internet File Transfer: This internet-based filing service allows eligible registrants to file their GST/HST returns directly to the Canada Revenue Agency over the Internet using their third-party accounting software. You will need to pay any GST/HST owing by mail, through your financial institution, or electronically using the Canada Revenue Agency’s My Payment electronic payment service.
- My Business Account: My Business Account is an online Canada Revenue Agency service that allows businesses to manage a variety of tax-related business activities including GST/HST, payroll, corporate income tax, excise tax, etc. You can use it to file/adjust GST/HST returns, view account balances, manage direct deposits, and view rebates.
What Happens If You Don't File a GST/HST Return on Time
If your GST/HST account balance is $0 or negative there are no penalties for late filing your GST/HST return. If there are funds owing and your return is late you will be subject to penalties.