How to File GST/HST Returns in Calgary

Calgary businesses must register for GST/HST filing services when their revenue exceeds $30,000 in any calendar quarter. Many local entrepreneurs find it challenging to keep up with sales tax rules and requirements.

Alberta makes things a bit easier with its GST-only structure at 5%, unlike other provinces that use harmonized sales tax systems. The process still needs careful attention. The Canada Revenue Agency (CRA) expects most small businesses to file GST/HST returns yearly. Your business can choose quarterly or monthly reporting based on annual taxable sales.

The CRA now requires electronic filing for GST/HST registrants starting in 2024. Only a few exceptions exist to this rule. This change will affect your business’s tax management. You might face a $250 penalty if you don’t respond when asked to file.

This piece gives you clear steps to file your GST/HST returns the right way in Calgary. We’ll help you understand everything you should know about the filing process. New business owners and experienced entrepreneurs will find useful tips to meet all requirements with confidence.

Understanding GST/HST in Calgary

Calgary businesses need to understand the Canadian sales tax system’s specific framework. The Goods and Services Tax (GST) plays a significant role in Alberta’s business environment and works differently from other provinces.

What is GST and how it applies in Alberta

The Goods and Services Tax (GST) works as a federal value-added tax throughout Canada. The government introduced it on January 1, 1991, and it applies to most goods and services at a 5% rate. Alberta businesses just need to collect and send the federal GST because the province doesn’t have a provincial sales tax.

GST works as a consumption tax that applies at several production and distribution stages. Businesses collect this tax from customers but don’t pay it themselves—the end consumer does. My role as a registered Calgary business involves charging GST on taxable supplies, collecting it, and sending it to the Canada Revenue Agency (CRA).

Alberta’s tax system is different from most Canadian provinces. We only use the 5% GST with no extra provincial sales tax. This makes tax compliance easier for Calgary businesses compared to places that use both GST and PST or the combined HST.

Some goods and services have special GST categories:

• Zero-rated supplies: These get taxed at 0% GST, so no tax gets collected. Examples include basic groceries, prescription drugs, and most agricultural products.
• Exempt supplies: These don’t have any GST. You’ll find this with long-term residential rents, health services, and educational services.

Difference between GST and HST

Calgary businesses mainly deal with GST, but knowing the difference between GST and HST helps when doing business across provincial borders.

GST represents the federal portion at 5%, while the Harmonized Sales Tax (HST) combines federal GST with provincial sales taxes in participating provinces. This alignment helps streamline tax administration and makes things easier for businesses operating in multiple provinces.

HST rates change by province:

• Ontario charges 13%
• New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island charge 15%

Other provinces keep their provincial sales taxes separate from the federal GST:

• British Columbia: 5% GST + 7% PST
• Saskatchewan: 5% GST + 6% PST
• Manitoba: 5% GST + provincial retail sales tax (RST)

My Calgary business needs to charge the right HST rate based on the customer’s location when selling to HST provinces. A product shipped to an Ontario customer requires 13% HST instead of Alberta’s 5% GST.

Why Calgary businesses must comply

Most Calgary businesses can’t skip GST regulations. Registration becomes mandatory when your revenue goes over CAD 41,800.81 in any four consecutive calendar quarters or in one calendar quarter. This number is more precise than the $30,000 threshold mentioned in some places.

You must register within 29 days of your effective registration date, which usually means the day you went over the threshold.

Small suppliers below the threshold might want to register voluntarily. This lets them claim input tax credits (ITCs) and recover GST paid on business purchases used for taxable goods or services.

Missing GST regulations can lead to penalties and interest charges. GST compliance affects several business areas:

1. You need to set aside collected GST for payment
2. Your pricing needs to factor in tax implications
3. Your books should track collected and paid GST separately
4. You must file returns based on your assigned schedule

Calgary businesses should understand both GST basics and compliance details. Good GST management will keep operations smooth and avoid expensive penalties that could hurt your business.

The GST system in Calgary might be simpler than HST provinces, but you still need careful record-keeping to meet all CRA regulations.

Who Needs to Register and File

Your Calgary business’s first step toward tax compliance is figuring out if you need to register for GST/HST. The Canada Revenue Agency (CRA) sets specific thresholds that make registration mandatory, though some businesses find value in registering even when they don’t have to.

Revenue threshold for mandatory registration

The CRA calls your business a “small supplier” until your worldwide taxable supplies reach more than CAD 41,800.81 in a single calendar quarter or over four consecutive calendar quarters. This amount is different from the usual $30,000 figure because of specific CRA calculations.

You’ll need to register under two scenarios:

1. Your revenue goes over CAD 41,800.81 in a single calendar quarter. This means you’re no longer a small supplier right away. You must register for GST/HST on the day you cross this threshold. You then have 29 days to complete your registration.
2. Your revenue exceeds CAD 41,800.81 over four consecutive calendar quarters (but not in any single quarter). You stay a small supplier until the end of the month after the quarter where you passed the threshold. Registration becomes mandatory at the start of the following month.

Your threshold calculation should include all worldwide taxable supplies. Revenue from financial services, capital property sales, and goodwill from business sales don’t count toward this total.

Some businesses must register no matter what their revenue is:

• Taxi and commercial ride-sharing drivers
• Non-residents selling taxable supplies in Canada
• Businesses selling admissions to entertainment events in Canada

Voluntary registration for small suppliers

Small suppliers can choose to register for GST/HST even if they’re under the threshold. Yes, it is an option that comes with several benefits:

• You can claim input tax credits (ITCs) to get back GST/HST paid on business purchases
• You’ll set up proper record-keeping systems early
• You’ll be ready for growth when you expect to exceed the threshold soon
• This works well for businesses with big startup costs

Once you register voluntarily, your small business takes on the same responsibilities as mandatory registrants. This means you must:

1. Charge and collect GST/HST on all applicable goods and services
2. File GST/HST returns for each reporting period—even if you have no revenue
3. Remit collected taxes based on your assigned filing frequency

Your voluntary registration usually starts the day you ask for your GST/HST account, though it can go back up to 30 days before your application.

Sole proprietors vs corporations

Your business structure changes how registration requirements work, especially for threshold calculations and liability.

Sole proprietors must count all revenue from worldwide taxable supplies across their businesses and those of their associates (if associated when the calendar quarter begins). As the owner, you’re responsible for all business decisions and carry all risks, including personal property and assets.

Corporations and partnerships must include all revenue from worldwide taxable supplies and their associates’ supplies. A corporation stands as its own legal entity, which protects personal assets in most cases.

Corporate directors might still face tax liability for GST/HST debts. The Excise Tax Act’s subsection 323(1) makes directors “jointly and severally liable” if their corporation doesn’t remit GST/HST.

Your annual revenue determines how often you file:

• Businesses making CAD 2.09 million or less can choose annual, quarterly, or monthly reporting
• Those earning between CAD 2.09-8.36 million can pick quarterly or monthly reporting
• Businesses earning over CAD 8.36 million must file monthly

GST/HST compliance starts with knowing your registration requirements in Calgary. A tax professional can help you create the best registration strategy for your business needs.

Choosing the Right Filing Frequency

After registering for GST/HST, you need to pick the right filing frequency. This choice shapes how often you submit returns. It also determines when you pay collected taxes to the Canada Revenue Agency (CRA).

Annual, quarterly, and monthly options

The CRA lets you choose from three filing frequencies that come with specific rules and deadlines:

Annual Filing: You can file once yearly if your business has annual taxable sales of CAD 2.09 million or less. The deadline to file and pay falls three months after your fiscal year-end.

Businesses with December 31 fiscal year-end and business income must pay by April 30 and file by June 15. Those without income for tax purposes need to file and pay three months after their fiscal year-end.

Quarterly Filing: This option needs four filings yearly and applies to businesses with annual taxable sales between CAD 2.09 million and CAD 8.36 million. You must file returns and pay one month after each reporting period ends. To name just one example, see a March 31 quarterly period that needs filing by April 30.

Monthly Filing: Businesses with annual taxable sales above CAD 8.36 million must file monthly. Similar to quarterly filing, you need to submit returns and pay one month after the period ends. A February reporting period needs filing by March 31.

How CRA assigns your reporting period

CRA sets your original reporting period based on your estimated yearly revenue:

• Businesses projecting annual sales of CAD 2.09 million or less get an annual reporting period with December 31 as the default year-end.
• Annual sales between CAD 2.09 million and CAD 8.36 million qualify for a quarterly reporting period.
• Sales exceeding CAD 8.36 million yearly lead to a monthly reporting period.

Charities can pick their filing frequency whatever their annual taxable sales.

Your reporting period stays the same until you change it or your threshold amount grows too large for your current period.

When and how to change your frequency

You can switch to more frequent filing if it helps your business better. This option offers several benefits:

• Short reporting periods help you avoid big yearly payments
• You get refunds faster if you expect them often
• Businesses with zero-rated supplies usually prefer filing more often

Here’s what you need to do to change your GST/HST reporting period:

1. Check if your annual taxable sales qualify for your preferred reporting period
2. Fill out Form GST20, “Election for GST/HST Reporting Period”
3. Submit your choice within these timeframes:
   • New registrants: before or on your GST/HST registration date
   • Switching from quarterly to annual: within three months of starting your fiscal year
   • Other changes: within two months of the election’s start date

You can also make this change online through CRA’s “File an Election” service in My Business Account or Represent a Client.

Note that after changing your reporting period, you’ll need to keep it for at least a year. Changes start when you become a registrant, begin your fiscal year, or start a fiscal quarter (in specific cases).

Your Calgary business’s cash flow, administrative abilities, and expected refunds should guide your choice of filing frequency.

Filing Methods for GST/HST Returns

The Canada Revenue Agency (CRA) now asks most GST/HST registrants to file their returns electronically for reporting periods that start in 2024 or later. Calgary businesses have several filing options to pick from. The best choice depends on your business needs and setup.

Using CRA My Business Account

My Business Account stands out as the most detailed and feature-rich electronic filing option. This secure online portal lets you:

• File returns without needing a GST/HST access code
• Pay directly through the system
• Submit most elections and certain rebates
• Add required schedules to your return
• Get immediate confirmation numbers

Filing through My Business Account is straightforward. Just log in, pick your GST/HST account, and click “File a return” from your overview page. The system walks you through each step and lets you check your information before submitting. Once you’re done, you’ll get a 6-digit confirmation number that shows the CRA has accepted your filing.

One great feature is that you can let representatives file on your behalf – perfect if you work with accountants or tax professionals.

Filing through GST/HST NETFILE

Don’t have a CRA account? GST/HST NETFILE might be your answer. This method:

• Meets the electronic filing rules
• Gives you instant confirmation numbers
• Works without a CRA account
• Needs a 4-digit access code

NETFILE users need their Business Number, reporting period dates, and access code. The system gives you a 6-digit confirmation number after a successful submission. Remember that your session times out after 35 minutes of no activity, and your work won’t save until you submit.

NETFILE works well for regular returns but comes with limits. You can’t file elections or certain rebates that aren’t in the CRA guidelines.

Paper filing and when it’s allowed

Electronic filing might be mandatory for most businesses now, but paper filing still works for:

• Charities
• Selected listed financial institutions
• Businesses with special CRA exemptions

Paper filers must send Form GST34-2, GST62, or RC7200 to the address on the return. Watch out – filing by paper when you should file electronically can lead to penalties.

Paper filing has fewer features than electronic options. You can’t file certain rebates electronically, add schedules, or make electronic payments. The processing also takes much longer.

Filing through financial institutions or software

Calgary businesses have two more electronic options:

Financial Institutions: Canadian banks that participate let you file returns and pay GST/HST through Electronic Data Interchange (EDI). You don’t need a GST/HST access code, but you can’t usually file rebates, elections, or combined GST/HST and QST returns.

Third-Party Accounting Software: The CRA approves various accounting programs that create and upload returns using GST/HST Internet File Transfer. This option:

• Makes files in the required .tax format
• Sends them straight to CRA systems
• Needs a GST/HST access code
• Won’t work for schedules or rebates

Calgary businesses can make GST/HST compliance easier by picking the right filing method. Look at your business needs, tech capabilities, and whether you use tax professionals to find your best option.

Information You Need to File

Preparing your GST/HST return needs specific financial information about your business operations. You must collect the right data beforehand to file accurately and meet Canada Revenue Agency (CRA) requirements.

Total sales and revenue

Your GST/HST return requires reporting total sales and revenue on Line 101. This figure must include:

• All revenue from supplies of property and services
• Zero-rated supplies (taxable at 0%)
• Exempt supplies
• Other revenue during the reporting period

Businesses using the regular method should exclude provincial sales tax, GST/HST, and amounts from previous returns. The Quick Method of accounting needs your Line 101 figure to include 100% of the GST/HST collected plus your sales figures.

Your reported sales must line up with your income tax filings. The CRA often audits when it finds differences between GST/HST returns and income tax returns. The sum of revenues on Line 101 should settle with your total gross revenue on your T2 corporate or T1 personal income tax return.

GST/HST collected and paid

Your return needs detailed tracking of:

1. GST/HST you collected from customers
2. GST/HST you were required to collect (tax billed but not yet paid)
3. GST/HST you paid on business purchases and expenses

Report this information on Line 103 (GST/HST collected or collectible) and Line 106 (GST/HST paid or payable) of your return. Separate columns in your sales and purchase records make tracking GST/HST amounts easier.

Your accounting method must identify specific tax amounts, even with taxes included in the total price. Your records should show the GST/HST collected, the amount paid for business expenses, and your deductible amount from net tax.

Claiming input tax credits (ITCs)

Input tax credits are the foundations of GST/HST registration that let you recover taxes paid on eligible business expenses. To claim ITCs, you must meet these conditions:

• Your GST/HST registration must be active during the reporting period
• Property or services must be for commercial activities
• You must have paid or owe the GST/HST
• You need proper documentation to support your claim

Eligible ITC expenses typically include:

• Business start-up costs
• Legal and accounting fees
• Office expenses and supplies
• Commercial rent
• Machinery and equipment
• Capital property in many cases

Enter the eligible amount on Line 106 of your return to claim ITCs. The CRA lets you claim ITCs up to four years after the initial due date. Businesses with more than CAD 8.36 million in sales have only two years to claim.

Keep supporting documentation for six years from the end of the last relevant year. This includes invoices, receipts, contracts, and proof of GST/HST payments on business purchases.

Note that Quick Method accounting users cannot claim ITCs for most operating expenses since remittance rates already account for these taxes.

Common Filing Mistakes to Avoid

Calgary businesses with years of experience still struggle with GST/HST compliance. The Canada Revenue Agency finds the same mistakes year after year that end up costing businesses time, money and create unnecessary stress. You can avoid these common pitfalls by understanding them better.

Missing deadlines

Calgary businesses most commonly make the mistake of filing late. The CRA sets specific deadlines based on your reporting period:

• Monthly and quarterly filers must submit returns and payments one month after the end of their reporting period
• Annual filers typically have three months after their fiscal year-end
• Individuals with business income and a December 31 fiscal year-end must remit payment by April 30, while filing by June 15

Your business profits take an unnecessary hit from penalties and interest charges that keep adding up until you comply. These costs pile up quickly. You can prevent these expensive mistakes by setting calendar reminders or using automated filing services. Contact BOMCAS Canada today to get help setting up reliable deadline management systems.

Incorrect ITC claims

Businesses often make Input Tax Credit (ITC) mistakes because they don’t fully understand which expenses qualify. Here are some common errors:

• Claiming 100% of GST/HST on meals and entertainment when only 50% is eligible
• Not prorating ITCs for personal vehicles used partly for business
• Claiming ITCs without proper documentation or for non-business purchases
• Missing eligible ITC claims due to poor record keeping

You can prevent these errors by keeping organized records that clearly separate business and personal expenses.

Not filing nil returns

Many Calgary businesses overlook filing returns during periods without activity. The CRA requires all GST/HST registrants to submit returns for every reporting period, even if they’re reporting zeros. You must file these “nil returns” whatever your business activity levels.

The CRA might penalize you, hold your refunds, or flag you for an audit if you skip nil returns. They may also assess arbitrary amounts based on your previous returns if you repeatedly fail to file.

Charging GST incorrectly

Businesses in Calgary often get confused about applying the right tax rates, especially for sales across provincial borders. Alberta uses a 5% GST-only system, unlike provinces that use HST at rates of 13-15%. You need to charge tax based on your customer’s location for interprovincial sales.

The CRA will hold you responsible for remitting GST/HST even if you failed to charge it. This creates financial pressure since you’ll have to pay tax you never collected from customers.

Penalties and What Happens If You File Late

Missing GST/HST filing deadlines will cost Calgary businesses money. You should know these penalties to avoid surprise costs and stay compliant with the Canada Revenue Agency (CRA).

CRA late filing penalties

The CRA uses a specific formula to calculate penalties when you file your GST/HST return late and owe money:

A + (B × C), where:

• A is 1% of the amount owing
• B is 25% of A
• C is the number of complete months the return is overdue (to a maximum of 12 months)

To cite an instance, if you owe $10,000 and file three months late, your penalty would be $100 (1% of $10,000) plus $75 (25% of $100 × 3), making it $175 total.

You won’t face penalties if you owe nothing or if the CRA owes you a refund. But filing late too often makes you more likely to be audited.

The CRA will charge an extra penalty of $348.34 if you ignore their formal demand to file, on top of other penalties.

Interest on unpaid amounts

The CRA charges interest on all overdue GST/HST amounts. The prescribed interest rate has been the simple rate plus 4% since April 1, 2007. This interest compounds daily, so your debt grows faster the longer you wait to pay.

The simple rate equals the average rate on 90-day Treasury Bills rounded up to the nearest percentage. Your interest starts building the day after payment was due until you pay the full amount.

New late filers face lighter consequences than repeat offenders. The interest applies whether it’s your first time or not.

How to request an exemption

You might qualify for relief from penalties and interest in special cases. The CRA might waive these charges if factors beyond your control stopped you from complying.

You can request relief by:

• Using the “Request relief of penalties and interest” service through CRA My Business Account
• Submitting Form RC4288 online or by mail

Your request needs these supporting documents:

• Proof of special circumstances (death certificates, medical statements)
• Payment plans and financial details for hardship cases
• Records of wrong information from the CRA
• Full timeline of steps taken to fix non-compliance

Contact BOMCAS Canada today because professional help improves your chances of success with the CRA.

Note that you have 10 calendar years after the reporting period ends to ask for relief. Late-filing penalties aren’t tax deductible, so preventing them is your most economical solution.

How BOMCAS Canada Can Help

Calgary business owners often struggle with GST/HST obligations. Professional support from a dedicated tax service provider can make this complex process simple and manageable. BOMCAS Canada is a specialized accounting firm that provides detailed GST/HST services for Calgary businesses.

Full-service GST/HST compliance

BOMCAS Canada’s end-to-end GST/HST compliance solutions take the hassle out of tax obligations. Their expert team takes care of all GST/HST management aspects:

• Registration help for new businesses or those meeting threshold requirements
• Careful preparation of GST/HST returns with exact calculations
• Electronic filing with the CRA that beats deadlines
• Full compliance reviews that spot and fix discrepancies

Without doubt, their biggest advantage is providing all-year support as needed. Their accountants work alongside you through the year and give unlimited help to answer questions. You’ll know all costs upfront with no invoice surprises.

Support for Calgary-based businesses

BOMCAS Canada excels in serving Calgary businesses with deep knowledge of local tax requirements. They provide custom accounting solutions that make financial management easier while meeting Canadian tax laws.

Their Calgary tax specialists understand the unique challenges local businesses face with GST regulations in Alberta’s GST-only environment. They create custom strategies that line up with your business’s specific needs and goals.

Contact BOMCAS Canada today to find how their local expertise can help your Calgary business stay GST compliant with less paperwork.

Technology-driven tax solutions

BOMCAS Canada uses modern technology to improve their tax services in today’s digital world. They provide:

• Remote, online, and virtual accounting solutions for easy access
• Cloud-based systems that keep financial records precise
• Immediate tracking of GST/HST obligations to avoid missed deadlines
• Quick electronic filing systems for faster processing

Working with BOMCAS Canada gives you access to professional expertise and tech efficiency. Their steadfast dedication to excellence and customer satisfaction makes them a trusted partner in your business’s financial success.

Conclusion

Calgary businesses must file their GST/HST returns correctly. This piece covered everything in GST/HST compliance within Alberta’s unique 5% GST-only environment.

Your registration requirements depend on revenue thresholds, which are the foundations of proper compliance. Your business must follow specific filing frequencies and CRA deadlines when you exceed the $41,800.81 threshold or choose to register voluntarily. The right filing method through My Business Account, NETFILE, or other options will improve your tax administration process.

Successful filing needs accurate information. Detailed records of your total sales, GST/HST collected, and GST/HST paid on business expenses will give a complete picture of your returns. You can claim eligible input tax credits too. Missing deadlines, incorrect ITC claims, forgotten nil returns, and wrong GST charges can get pricey with penalties and interest charges.

Non-compliance can affect your business by a lot. Late filing penalties, daily compound interest, and potential audit triggers create unnecessary financial strain. The CRA offers relief options in extraordinary cases. Timely filing is nowhere near as difficult as asking for exemptions later.

BOMCAS Canada gives expert help to Calgary businesses with their GST/HST obligations. Their complete services include registration, return preparation, and CRA correspondence support. Their technology-driven solutions offer immediate tracking and quick electronic filing.

GST/HST management is more than just following rules—it’s smart financial practice that helps your business grow. Call BOMCAS Canada today to turn your tax obligations into a manageable part of your operations.

FAQs

Q1. What are the steps to file a GST/HST return in Calgary? To file a GST/HST return, first log into your CRA My Business Account or use GST/HST NETFILE. Enter your total sales, GST/HST collected, and input tax credits claimed. Review the information, submit the return electronically, and make any payment due by the deadline.

Q2. How does the Quick Method of accounting work for GST/HST? The Quick Method allows eligible small businesses to remit only a portion of the GST/HST they collect. While you still charge the full tax rate on taxable supplies, you use a simplified calculation to determine how much to remit to the CRA, potentially reducing your paperwork and administrative burden.

Q3. What are the payment options for submitting GST/HST to the CRA? You can pay your GST/HST through various methods including online banking, CRA’s online services, at your bank or credit union, via ATM, at Canada Post locations, or through third-party service providers. Choose the option that’s most convenient for your business.

Q4. How can a business register for GST in Alberta? To register for GST in Alberta, you can apply online through the CRA website, call the CRA at 1-800-959-5525, or submit an application by mail or fax to the Canada Revenue Agency. Ensure you have your business information ready when applying.

Q5. What are the consequences of filing GST/HST returns late in Calgary? Late filing of GST/HST returns in Calgary can result in penalties and interest charges. The CRA calculates penalties based on the amount owing and the number of months the return is overdue. Additionally, interest is compounded daily on unpaid amounts, potentially leading to significant financial consequences for your business.