If you're a freelancer or business owner in Canada, it's important to know when you need to register for a Harmonized Sales Tax (HST) number and declare your income. Here's a guide based on official Canadian government sources.
When to Register for an HST Number
In Canada, you must register for a Goods and Services Tax (GST)/HST account if your total revenue from taxable supplies exceeds $30,000 over four consecutive calendar quarters. This threshold applies to most small suppliers, including freelancers and small business owners. Once you exceed this amount, you are required to register for an HST number and begin collecting HST from your clients123.
Declaring Your Income
Regardless of whether you meet the $30,000 threshold for HST registration, you must declare all your income as a freelancer or business owner. You are considered self-employed, which means you need to report your income on your personal income tax return. Keeping detailed records of all income and expenses is crucial for filing taxes and for any potential audits by the CRA45.
Voluntary Registration
Even if you don't meet the $30,000 threshold, you may choose to voluntarily register for an HST number. This allows you to claim input tax credits for the HST you pay on business-related expenses, potentially offsetting the amount of HST you owe6.
Record-Keeping
Maintaining accurate records of your business income and expenses is essential. This includes keeping receipts, invoices, and other documentation related to your business activities. Proper record-keeping ensures you can accurately report your income and claim eligible deductions or credits7.
In summary, as a freelancer or business owner in Canada, you need to register for an HST number once your revenue exceeds $30,000 in a year. However, you must declare all your income regardless of whether you meet this threshold. For more detailed information, refer to the CRA's official guidelines and resources.
Citations
- https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/when-register-charge.html
- https://www.canada.ca/en/revenue-agency/news/cra-multimedia-library/businesses-video-gallery/transcript-gst-hst-registration.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/2-1/required-registration.html
- https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/digital-economy-gsthst/register-get-ready.html
- https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/digital-economy-gsthst/register-gst-hst.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4022/general-information-gst-hst-registrants.html
- https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/account-register.html