Alberta is the only province in Canada without a provincial sales tax. As a result, Alberta businesses deal exclusively with the federal Goods and Services Tax (GST) at a rate of 5% — not the Harmonized Sales Tax (HST) that applies in provinces like Ontario and Nova Scotia. This simplifies things considerably, but the obligations around GST registration, collection, and remittance are still meaningful and frequently misunderstood by new business owners.
When You Must Register
Registration for a GST account is mandatory once your total worldwide taxable supplies exceed $30,000 in a single calendar quarter, or in the last four consecutive calendar quarters combined. The moment you cross this threshold — even mid-quarter — you are required to register and begin charging GST on taxable supplies from that point forward.
Note that the threshold is based on taxable supplies, not all revenue. Certain exempt supplies (such as most residential rent, health care services, and financial services) do not count toward the $30,000 threshold.
Voluntary registration is available even if your revenue is below $30,000. This may be beneficial if your business makes significant purchases on which GST is paid, since registration allows you to claim those amounts back as input tax credits.
Source: Canada Revenue Agency. When to register for a GST/HST account. canada.ca
What You Collect
Once registered, you must charge 5% GST on all taxable supplies you make to customers. Most goods and services sold in Canada are taxable supplies. However, there are important categories of zero-rated supplies (taxed at 0%) and exempt supplies (not subject to GST at all). Zero-rated supplies include basic groceries, prescription drugs, and certain agricultural products. Exempt supplies include residential rent, most health care services, educational services, and financial services.
Source: Canada Revenue Agency. Types of supply — zero-rated and exempt. canada.ca
Input Tax Credits
As a GST registrant, you can claim input tax credits (ITCs) for the GST you paid or owe on purchases and expenses used in your commercial activities. This is the fundamental mechanism of the GST system: you collect GST from your customers, claim back the GST you paid on your business inputs, and remit the net difference to the CRA. If you paid more GST on your inputs than you collected, the CRA owes you a refund.
To claim ITCs, you must have supporting documentation — receipts and invoices that show the supplier’s GST registration number, the date, the total amount, and the amount of GST charged. The documentation requirements vary depending on the size of the purchase.
Filing Periods and Deadlines
Your GST filing frequency depends on your annual taxable supplies:
- Annual filers (under $1.5 million in taxable supplies): file one return per year, due three months after the fiscal year-end
- Quarterly filers ($1.5 million to $6 million): file four returns per year, due one month after each quarter-end
- Monthly filers (over $6 million, or elected): file monthly, due one month after each reporting period
You must file a GST return for every reporting period even if you have no activity to report — a nil return is required when you had no sales and no purchases.
Source: Canada Revenue Agency. GST/HST filing and remittance deadlines. canada.ca
Late Filing and Remittance Penalties
The CRA charges a penalty for late-filed GST returns of 1% of the balance owing plus 25% of that 1%, multiplied by the number of months late, up to 12 months. Interest also compounds daily on any unpaid balance. Missing remittance deadlines — sending in the GST you collected later than required — is treated separately and can result in immediate penalty assessments.
The Quick Method
Some small businesses with annual taxable supplies of $400,000 or less may elect to use the CRA’s Quick Method of accounting for GST. Under the Quick Method, you remit a fixed percentage of your GST-included sales rather than calculating and claiming ITCs on individual purchases. This simplifies the bookkeeping considerably for eligible businesses. Whether the Quick Method is advantageous depends on your industry and expense profile — it is worth discussing with a CPA before electing.
Source: Canada Revenue Agency. Quick Method of accounting for GST/HST. canada.ca
Key Takeaway: Once you cross the $30,000 threshold, GST obligations are immediate. Getting registered correctly, collecting the right amount, maintaining proper documentation, and filing on time are the four pillars of compliance that keep a business out of trouble with the CRA.
Nguyen Scott LLP handles GST registration, filing, and planning for Alberta businesses. Contact us at nsllp.ca/contact-us/ or call 780-458-5479.