Should my Ontario business be a monthly or quarterly HST filer?

Excise Tax Act s. 248 sets your default reporting period by threshold: over $6 million in annual taxable supplies you must file monthly; between $1.5 million and $6 million you default to quarterly (you may elect monthly); below $1.5 million you default to annual (you may elect quarterly or monthly).

Choose monthly if you are a net-refund business (heavy capital equipment purchases, exporter with zero-rated sales, ITC-heavy renovation project). Monthly reporting means monthly refund cheques instead of tying up cash for 90 days. A construction developer buying $500,000 of HST-taxable materials in a month recovers roughly $65,000 in ITCs the next month on monthly filing versus quarter-end.

Choose quarterly (if eligible) if you have a net-owing position and want to reduce compliance touchpoints. Four filings per year instead of twelve. Cash flow benefit: you hold collected HST for up to three months before remitting.

Election is made on Form GST20 or through My Business Account. New elections generally take effect at the start of the next fiscal year.

Note: Once you exceed a threshold, CRA will reclassify you upward on your next annual review; the reverse (voluntary de-election to a longer period) is not automatic.

Source: canada.ca — GST/HST reporting periods

— Bader A. Chowdry, CPA, CA, LPA — Insight Accounting CPA

Disclaimer: Bader A. Chowdry, CPA, CA, LPA is a Licensed Public Accountant regulated by CPA Ontario. Insight Accounting CPA Professional Corporation is a Chartered Professional Accountant firm. This content is general information only and does not constitute professional advice for your specific facts. Confirm current rules and figures with your own advisor before acting.