Harmonized Sales Tax (HST) is one of the most frequently misunderstood obligations for small business owners in Kitchener. Getting it wrong can result in significant penalties, interest, and CRA audit risk.
What Is HST in Ontario?
Ontario charges HST at 13%, which combines the 5% federal GST with the 8% provincial component. As a business, you collect HST from customers on taxable supplies and remit the net amount to CRA after claiming Input Tax Credits (ITCs) on your business purchases.
When Do You Have to Register for HST?
You are legally required to register for HST once your worldwide taxable revenues exceed $30,000 in any single calendar quarter, or in the preceding four consecutive calendar quarters combined.
Filing Frequencies
- Annual: revenues under $1.5 million (most small businesses)
- Quarterly: revenues between $1.5 million and $6 million
- Monthly: revenues over $6 million
Input Tax Credits: Your Most Important Tool
When you purchase goods and services for your business, you pay HST to your suppliers. The HST you pay on business inputs can be recovered as an Input Tax Credit on your HST return, reducing what you owe CRA.
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The Most Common HST Mistakes
- Failing to register when the $30,000 threshold is crossed
- Not collecting HST from customers after the obligation arises
- Missing HST return deadlines and triggering penalties
- Claiming ITCs without proper documentation (you must keep invoices)
- Incorrectly treating exempt or zero-rated supplies as taxable
Our HST filing service in Kitchener handles registration, return preparation, ITC recovery, and CRA correspondence for businesses of all sizes.