When you are a business owner who provides goods or services that are subject to goods and services tax (GST), you must be aware of the rules of GST. Since GST is a flat percentage, calculating GST is fairly straightforward if you keep good business records of your purchases and sales. Once you have that information, however, what do you do with it? You must know where and when to submit your GST return, what payment options are available to you, and what penalties will apply for non-payment. 

Payment deadlines

For provinces that use the HST (harmonized sales tax) there is only one amount that needs to be remitted, and it will go directly to the federal government in Ottawa. The Canadian Revenue Agency will then calculate the amount due to the province and remit. The deadline for GST and HST is dependent on your filing frequency. For monthly filers, the return and tax are due one month after the end of the reporting month. For quarterly filers, the return and tax are due one month after the end of the reporting quarter. For annual corporate filers, the return and tax are due 3 months after fiscal year-end. Lastly, individuals who have business income subject to GST who have a December 31 tax year-end must pay any tax due by April 30 of the following year. However, if they have no tax due, they can put off filing the no tax due return until June 15 of that year. Note that businesses that are registered for GST must submit a return for the reporting period even if there is no GST/HST tax due. 

For provinces that utilize both GST and PST (general and provincial sales tax), the federal portion of the GST remains the same as above. Each province has its own policies for PST deadlines. 

• British Columbia – the PST must be filed and paid on or before the last day of the month following the reporting period. Like the GST, the reporting period can be monthly, quarterly, or annually depending on the amount of PST you owe every year.  
• Manitoba – Manitoba’s version of PST is called RST, or Retail Sales Tax. It differs from GST in that RST paid by the business is generally not able to be used to offset RST collected by the business. It is collected on a monthly or quarterly basis, with a due date of the 20th day of the month following the end of the reporting period. For example, if you file monthly, July 2022’s RST return would be due August 20, 2022. 
• Saskatchewan – Saskatchewan PST returns and payments are due on the 20th day of the month following the end of the reporting period (monthly, quarterly, or annually) if filed on paper, or by the last day of the month following the reporting period if filed electronically.
• Quebec – The Quebec Sales Tax must follow the same filing schedule and fiscal year as the GST and the requirements are the same. If you file monthly or quarterly, you must submit any payment and returns on the last day of the month following the reporting period. If you are an annual filer, returns are generally due on the last day of the third month following the end of the fiscal year.

Penalties and interest

Failure to file a GST/HST return leads to late filing penalties and interest on top of the amount due. If you do not owe any money or are due a refund, there is no penalty for late filing. However, if you owe tax, you will be subject to a late filing fee of at least 5% of the amount of tax due, plus one extra percentage point for each late month. 

• British Columbia PST: British Columbia will not levy any penalty for a first time unintentional mistake in filing. There is a penalty of 10% of the amount of tax due on a repeat error, or if you knew there was tax due but refused to pay it. There is a 25% penalty if there is a willful error or fraud at play, when you avoid paying tax by falsifying your tax records or return in some way. And finally, there is a 100% penalty on tax that you collected that you failed to remit to the province, or that you treated as business revenue rather than holding the tax in trust for the government.
• Manitoba RST: Late payments will be subject to a fee of the greater of $10 or 10% of the tax due. 
• Saskatchewan PST: A penalty of the lesser of 10% of the tax due, or $500, will be applied to late payments. Additionally, interest  will be imposed on unpaid amounts at the rate of the prime rate plus 3%.  
• Quebec QST: There is no penalty for failure to file if you have no tax due and have not filed, unless you receive a notice of filing due and still fail to file. Then there is a $250 penalty. There are also fees for unpaid balances due, which are calculated with the formula of 1% of unpaid balances plus ¼ of the 1% X the number of months the return is late. 

Did you know that Canada Revenue Agency is on the lookout for businesses that aren’t correctly collecting and remitting sales taxes? It’s true. And, the best way to avoid being audited by CRA is to be on top of your tax obligations. TwinkleTax, helps to simplify sales tax obligations. With our powerful software, you can achieve automatic calculations for sales taxes owed and manage filing for various tax jurisdictions with ease. Have more questions? Contact us today, we will be happy to answer your questions.