Small suppliers

GST/HST memorandum 2-2
June 2026

This version replaces the one dated May 1999. This memorandum has been updated to reflect changes in the definition of taxi business and the addition of information pertaining to prescribed selected listed financial institutions.

Except as otherwise noted, all statutory references in this publication are to the provisions of the Excise Tax Act (ETA). The information in this publication does not replace the law found in the ETA and its regulations. Although correct at the time of issue, this publication may not have been updated to reflect subsequent legislative changes.

If this information does not completely address your particular situation, you may wish to refer to the ETA or relevant regulation, or call GST/HST Rulings at 1‑800‑959‑8287 for additional information. If you require certainty with respect to any particular GST/HST matter, you may request a ruling. GST/HST Memorandum 1-4, Requesting a GST/HST Ruling or Interpretation, explains how to obtain a ruling or an interpretation.

If you are located in Quebec and wish to request a ruling related to the GST/HST, please call Revenu Québec at 1‑800‑567‑4692. You may also visit the Revenu Québec website at revenuquebec.ca to obtain general information.

For listed financial institutions that are selected listed financial institutions (SLFIs) for GST/HST or Quebec sales tax (QST) purposes or both, whether or not they are located in Quebec, the CRA administers the GST/HST and the QST. If you wish to make a technical GST/HST or QST enquiry related to SLFIs, please call 1‑855‑666‑5166.

GST/HST rates

Reference in this publication is made to supplies that are subject to the GST or the HST. The GST/HST rates are those that were in effect at the time of publishing. For the list of all applicable GST/HST rates (current and historic), go to GST/HST calculator (and rates).

If you are uncertain as to whether a supply is made in a participating province, refer to GST/HST Memorandum 3-3-2, Place of Supply in a Province – Overview.

Table of Contents

• General
• Small suppliers under section 148
• Consideration
  • When consideration becomes due
  • Associated persons
• Small suppliers under section 148.1
  • Charities and public institutions - gross revenue test
  • Gross revenue test
  • Small supplier branches or divisions of a public service body
• Small suppliers required to register
  • Taxi businesses
  • Selected listed financial institutions
    • Prescribed selected listed financial institutions
    • Prescribed group of SLFIs
• When to apply to be registered
• Entitlements and obligations
  • Supply by small supplier who is not a registrant
  • Input tax credits
  • Collection of the GST/HST

General

1. Under subsection 240(1), every person who makes a taxable supply in Canada in the course of a commercial activity engaged in by the person in Canada is required to be registered for GST/HST purposes, except where at least one of the following conditions is met:

• the person is a small supplier
• the only commercial activity of the person is the making of supplies of real property by way of sale otherwise than in the course of a business
• the person is a non-resident person who does not carry on any business in Canada (refer to Guide RC4027, Doing Business in Canada – GST/HST Information for Non-Residents, and GST/HST Policy Statement P-051R2, Carrying on business in Canada)

2. A small supplier is a person who meets the criteria to be a small supplier under sections 148 or 148.1. Section 148 is the general small supplier threshold test for persons (including public service bodies) and section 148.1 is the gross revenue test for charities and public institutions.

3. Under section 148, the small supplier threshold is calculated using calendar quarters and not fiscal quarters of a person. Under subsection 123(1), a calendar quarter means "a period of three months beginning on the first day of January, April, July, or October in each calendar year".

4. Under subsection 123(1), a person means "an individual, a partnership, a corporation, the estate of a deceased individual, a trust, or a body that is a society, union, club, association, commission or other organization of any kind".

5. A public service body is defined in subsection 123(1) to mean, "a non-profit organization, a charity, a municipality, a school authority, a hospital authority, a public college or a university". These terms are also individually defined in subsection 123(1).

6. A person that is a small supplier is not required to be registered for the GST/HST. A small supplier may voluntarily register for GST/HST purposes if the small supplier is engaged in a commercial activity in Canada. A small supplier that voluntarily registers becomes a registrant and is subject to all the obligations and eligible for all the entitlements of a registrant.

7. A registrant means "a person who is registered, or who is required to be registered, under Subdivision D of Division V". For more information on voluntary registration, refer to GST/HST Memorandum 2-3, Voluntary registration.

8. A person that is a small supplier and does not register for GST/HST purposes is not required to collect and remit the GST/HST on the consideration for most of its taxable supplies. However, certain exceptions apply as outlined in paragraphs 53 and 55 of this memorandum.

Small suppliers under section 148

9. Under subsection 148(1), a person is a small supplier throughout a particular calendar quarter and the following month if the total value of the consideration that became due, or was paid without having become due, in the previous four calendar quarters to the person or an associate of the person at the beginning of the particular calendar quarter for worldwide taxable supplies made by the person or associate does not exceed $30,000 or, where the person is a public service body, $50,000.

10. Where a person has branches or divisions, the person must include the value of consideration for all taxable supplies, including those made through its branches or divisions, as well as those of its associates, in its small supplier threshold calculation. A public service body may apply to have one or more of its branches or divisions designated as a small supplier division where certain conditions are met. For more information, refer to paragraphs 35 to 39 of this memorandum.

11. There is an exception to the rule in paragraph 9 of this memorandum. Under subsection 148(2), a person ceases to be a small supplier at any time in a calendar quarter if the total value of the consideration that became due, or was paid without having become due, in that calendar quarter to a person or an associate of the person at the beginning of the calendar quarter for worldwide taxable supplies made by the person or associate exceeds $30,000 or, where the person is a public service body, $50,000. The person ceases to be a small supplier immediately before the consideration becomes due or is paid for the particular taxable supply that puts the person over the small supplier threshold.

12. Under subsection 148(3), a non-resident person whose only business carried on in Canada is making supplies in Canada of admissions in respect of a place of amusement, a seminar, an activity, or an event is excluded from being a small supplier under section 148.

13. Under subsection 240(2), a person entering Canada for the purpose of making taxable supplies of admissions to a place of amusement, a seminar, an activity, or an event, must register for the GST/HST before making the supplies. For detailed information on registration requirements for non-residents, refer to GST/HST Memorandum 2-5, Non-resident registration.

14. The small supplier threshold amounts are increased in certain circumstances. Under paragraphs 148(1)(c) and 148(2)(c), where a person or an associate of the person at the beginning of the particular calendar quarter makes a taxable supply of a right to participate in a game of chance (such as bingo, or raffles) or is deemed, under section 187, to have made a supply of a service (that is, the taking of a bet) and the supply is a taxable supply, the $30,000 or $50,000 small supplier threshold of a person will be increased by the total of all amounts each of which is either of the following:

• an amount of money paid or payable by the person or the associate as a prize or winnings in the game or in satisfaction of the bet
• consideration paid or payable by the person or the associate for property or a service that is given as a prize or winnings in the game or in satisfaction of the bet

Consideration

15. Under subsection 123(1), consideration includes "any amount that is payable for a supply by operation of law". It can be money or a good or a service given in exchange or a combination of these. If the consideration or part of the consideration for a supply is other than money, the fair market value of the good or service given in exchange at the time the supply is made is the value of consideration or that part of the consideration for the supply.

16. Under section 148, for the purpose of calculating whether the value of consideration received for taxable supplies exceeds either the $30,000 or $50,000 small supplier thresholds, the calculation does not include the value of consideration received by the person or associate for any of the following:

• goodwill attributable to the sale of a business
• supplies of financial services
• supplies by way of sale of capital property

17. Additionally, the following amounts should be excluded when calculating the small supplier thresholds (this list is not all inclusive):

• any consideration for exempt supplies
• the GST/HST that would have been imposed (collected or collectible) if the person had been required to charge and collect the tax

18. Generally, federal and provincial taxes, duties, and fees payable by the recipient or payable or collectible by the supplier in respect of a supply are included in the consideration for the supply. In general, the small supplier threshold calculation should include any such taxes, duties, or fees. However, under section 154, certain provincial taxes, duties and fees payable by a recipient of a supply, which are prescribed in the Taxes, Duties and Fees (GST/HST) Regulations, are not included in the consideration for a supply and therefore, is not included in the small supplier threshold calculation.

19. Determining the application of section 154 to a tax, duty, or fee requires a review of the legislation which imposes that tax, duty, or fee to establish how that tax, duty, or fee is imposed. For more information on the amounts that are included or not included in the consideration for a supply, refer to GST/HST Memorandum 3-5, Application of GST/HST to Other Taxes, Duties, and Fees.

When consideration becomes due

20. When determining the total consideration for the small supplier thresholds it is necessary to include amounts of consideration that were paid, as well as amounts that were not paid but became due, to the person and any associates in the relevant calendar quarters.

21. Under subsection 152(1), "the consideration, or a part thereof, for a taxable supply is deemed to become due on the earliest of

• (a) the earlier of the day the supplier first issues an invoice in respect of the supply for that consideration or part and the date of that invoice,
• (b) the day the supplier would have, but for an undue delay, issued an invoice in respect of the supply for that consideration or part, and
• (c) the day the recipient is required to pay that consideration or part to the supplier under an agreement in writing."

22. Where property is supplied by way of lease, licence, or similar arrangement under a written agreement, subsection 152(2) provides that the consideration, or any part thereof, for the supply is deemed to become due on the day the recipient of the supply has to pay the consideration or part to the supplier under the agreement.

23. An example of consideration for taxable supplies that is paid without having become due is prepayments for taxable supplies to be made at some future date.

24. For detailed information on the timing of liability, refer to GST/HST Memorandum 3-1, Liability for Tax.

Associated persons

25. Under subsection 148(4), an associate of a particular person at any time means "another person who is associated at that time with the particular person." Section 127 sets out the rules for determining if the following person is associated with another person for GST/HST purposes, including for the purpose of the small supplier rules:

• a particular corporation is associated with another corporation if, by reason of subsections 256(1) to 256(6) of the Income Tax Act (ITA) the particular corporation is associated with the other corporation for income tax purposes
• a person other than a corporation is associated with a particular corporation if the particular corporation is controlled by the person or by a group of persons of which the person is a member and each of whom is associated with each of the others
• a person is associated with:
  • a partnership if the total of the shares of the profits of the partnership to which the person and all other persons who are associated with the person are entitled is more than half of the total profits of the partnership, or would be more than half of the total profits of the partnership if it had profits
  • a trust if the total of the values of the interests in the trust of the person and all other persons who are associated with the person is more than half of the total value of all interests in the trust
• a person is associated with another person if each of them is associated with the same third person

Small suppliers under section 148.1

Charities and public institutions - gross revenue test

26. In addition to the $50,000 small supplier threshold under section 148, a person that is a charity or a public institution at any time during a particular fiscal year, may determine its status as a small supplier for the particular fiscal year by applying a $250,000 gross revenue test under section 148.1.

27. Charities and public institutions can qualify as a small supplier under either the small supplier test under section 148 or the gross revenue test under section 148.1.

28. Subsection 123(1) defines a charity to mean "a registered charity or registered Canadian amateur athletic association within the meaning assigned to those expressions by subsection 248(1) of the [ITA], but does not include a public institution".

29. A public institution is defined in subsection 123(1) to mean "a registered charity (within the meaning assigned by subsection 248(1) of the [ITA] that is a school authority, a public college, a university, a hospital authority or a local authority determined under paragraph (b) of the definition municipality to be a municipality".

Gross revenue test

30. Under subsection 148.1(2), a charity or public institution is a small supplier throughout the particular fiscal year if that particular fiscal year is the person's:

• first fiscal year
• second fiscal year and its gross revenue for its first fiscal year was $250,000 or less
• third or later fiscal year and its gross revenue for either of its two previous fiscal years was $250,000 or less

31. Under subsection 123(1), the fiscal year of a person "means

• (a) if section 244.1 applies to the person, the period determined under that section,
• (b) if section 244.1 does not apply to the person and the person has made an election under section 244 that is in effect, the period that the person elected to be the fiscal year of the person, and
• (c) in all other cases, the taxation year of the person".

32. Subsection 148.1(1) defines gross revenue of a person that is a charity or public institution for a fiscal year of the person to mean the total of the following amounts (that are not included in determining the total under this paragraph for a preceding fiscal year of the person):

• a gift that is received or becomes receivable by the person during the fiscal year
• a grant, subsidy, forgivable loan, or other monetary assistance that is received or becomes receivable by the person during the fiscal year from a government, municipality, or other public authority other than a refund or rebate of or credit for taxes, duties, or fees imposed by an Act of Parliament or the legislature of a province
• if the person were a taxpayer under the ITA:
  • revenue that is, or would be under the ITA, included in determining the person's income for the fiscal year from property, a business, an adventure or concern in the nature of trade, or other source
  • an amount that is, or would be, a capital gain from the disposition of property of the person for the fiscal year under the ITA
  • other revenue of any kind whatever that is received or becomes receivable by the person during the fiscal year (other than an amount that is or would be included in determining the amount of a capital gain or loss of the person for the purpose of the ITA)
• less all amounts each of which is or would be, if the person were a taxpayer under the ITA, a capital loss for the fiscal year for the purposes of the ITA from the disposition of property of the person.

33. Note that references to an amount that is received or becomes receivable are based on the accounting method followed by the person in determining its revenue for the fiscal year.

34. When applying the gross revenue test, the gross revenue of the person as a whole, including branches and divisions that are part of one legal entity must be taken into account when determining the person's status as a small supplier. However, if the person has branches or divisions it may apply to have each branch or division with $50,000 or less in taxable supplies designated as a small supplier division.

Small supplier branches or divisions of a public service body

35. Under section 129, a public service body may apply to have its branches or divisions designated as small supplier divisions even though the body itself may be registered.

36. To qualify for this designation, each branch or division must meet all of the following criteria:

• have taxable supplies of $50,000 or less in the current calendar quarter and also $50,000 or less over the last four consecutive calendar quarters
• be separately identifiable by either its location or the nature of its activities
• have its own accounting systems and maintain separate records and books of account
• not have had an earlier designation of the branch or division revoked within the previous 365 days

37. For the purposes of section 129, the $250,000 gross revenue test does not apply as the gross revenue test applies only to the charity or public institution as a legal entity itself and not individually to each of its branches or divisions.

38. Application for this designation may be made by using Form GST31, Application by a Public Service Body to Have Branches or Divisions Treated As Eligible Small Supplier Divisions.

39. For more information, refer to GST/HST Memorandum 2-4, Branches and divisions.

Small suppliers required to register

Taxi businesses

40. Under subsection 240(1.1), every person who carries on a taxi business is required to register for GST/HST purposes even if the person is a small supplier.

41. Prior to July 1, 2017, a taxi business was defined in subsection 123(1) as a business carried on in Canada of transporting passengers by taxi for fares that are regulated under the laws of Canada or a province. Effective July 1, 2017, the definition of taxi business also generally includes a business of providing commercial ride-sharing services that are facilitated by a web application. A provider of commercial ride-sharing services is generally subject to the same GST/HST rules that apply to taxi operators, including the requirement to register for the GST/HST regardless of whether the provider is a small supplier, and to collect the GST/HST on those fares.

42. Under subsection 123(1) the new definition of taxi business "means

• (a) a business carried on in Canada of transporting passengers by taxi or other similar vehicle for fares that are regulated under the laws of Canada or a province, or
• (b) a business carried on in Canada by a person of transporting passengers for fares by motor vehicle — being a vehicle that would be an automobile, as defined in subsection 248(1) of the [ITA], if that definition were read without reference to 'motor vehicle acquired primarily for use as a taxi,' in its paragraph (c) and without reference to its paragraph (e) — within a particular municipality and its environs if the transportation is arranged or coordinated through an electronic platform or system, other than
  • (i) the part of the business that does not involve the making of taxable supplies by the person,
  • (ii) the part of the business that is the operation of a sightseeing service or the school transportation of elementary or secondary students, or
  • (iii) a prescribed business or a prescribed activity of a business".

43. As a result of the taxi business definition, providers of commercial ride-sharing services that are facilitated by a web application are required to register for the GST/HST and to charge the GST/HST on their fares in the same manner as taxi operators even if their annual taxable ride-sharing revenues do not exceed the small supplier threshold of $30,000, unless they are excluded by the definition from being a taxi business.

44. Where a small supplier who carries on a taxi business is also engaged in other commercial activities in Canada, the mandatory registration under subsection 240(1.1) applies only to the taxi business and does not apply to the small supplier's other commercial activities in Canada. However, the small supplier may voluntarily register in respect of its other commercial activities in Canada. For more information on voluntary registration, refer to GST/HST Memorandum 2-3.

45. For more information on taxi businesses, go to GST/HST information for taxi operators and commercial ride-sharing drivers, and refer to GST/HST Info Sheet GI-196, GST/HST and Commercial Ride-sharing Services.

Selected listed financial institutions

Prescribed selected listed financial institutions

46. Under subsection 240(1.2), and subsections 56(1) and 56(2) of the Selected Listed Financial Institutions Attribution Method (GST/HST) Regulations (SLFI Regulations), a prescribed selected listed financial institution (SLFI) is required to be registered for GST/HST purposes even if its annual taxable revenues do not exceed the small supplier threshold.

47. In general terms, a prescribed SLFI, for the purposes of subsection 240(1.2), is a segregated fund of an insurer or an investment plan, that has a reporting entity election under section 53 and/or a tax adjustment transfer election under section 55 of the SLFI Regulations in effect with its manager and does not have a consolidated filing election under section 54 of the SLFI Regulations in effect. For more information on these elections, refer to the relevant election forms such as Form RC4601, GST/HST Reporting Entity Election or Notice of Revocation for a Selected Listed Financial Institution, and Form RC4603, GST/HST Tax Adjustment Transfer Election or Notice of Revocation for a Selected Listed Financial Institution.

Prescribed group of SLFIs

48. Additionally, under subsection 240(1.3) and subsection 56(3) of the SLFI Regulations, a prescribed group of SLFIs is required to be registered as a group for GST/HST purposes even if its annual taxable revenues do not exceed the small supplier threshold. In addition, although each person in the prescribed group can not be registered separately, each is deemed to be registered for GST/HST purposes even if its annual taxable revenues do not exceed the small supplier threshold. Under subsection 240(1.4), where an SLFI becomes a member of an existing prescribed group of SLFIs, the SLFI is required to be added to the existing group registration even if its annual taxable revenues do not exceed the small supplier threshold.

49. In general terms, a prescribed group of SLFIs, for purposes of subsection 240(1.3), is a group of segregated funds of an insurer and/or investment plans, that have a consolidated filing election under section 54 of the SLFI Regulations in effect. The small supplier threshold does not apply in this situation.

50. For more information, refer to GST/HST Memorandum 17-6-2, GST/HST Registration and Reporting Requirements for Listed Financial Institutions, Including Selected Listed Financial Institutions.

When to apply to be registered

51. Where a person exceeds the small supplier threshold under subsection 148(1) in its four previous calendar quarters, the person will be a small supplier until the end of the month following the end of the fourth quarter provided the person does not exceed the small supplier threshold under subsection 148(2) in that following month.

52. Under subsection 240(2.1), "a person required under any of subsections (1) to (1.2) and (1.5) to be registered must apply to the Minister for registration before the day that is 30 days after

• (a) in the case of a person required under subsection (1.1) to be registered in respect of a taxi business, the day the person first makes a taxable supply in Canada in the course of that business;
• (a.1)  in the case of a selected listed financial institution required under subsection (1.2) to be registered, the day that is prescribed;
• (a.2)  in the case of a person required under subsection (1.5) to be registered, the first day on which the person is required under section 211.22 to be registered under this Subdivision; and
• (b) in any other case, the day the person first makes a taxable supply in Canada, otherwise than as a small supplier, in the course of a commercial activity engaged in by the person in Canada."

Entitlements and obligations

Supply by small supplier who is not a registrant

53. Under section 166, if a person makes a taxable supply and the consideration or a part of the consideration for the supply becomes due, or is paid without having become due, at a time when the person is a small supplier who is not a registrant, that consideration or part, is not to be included in calculating the GST/HST payable in respect of the supply. The following supplies are excluded from this provision:

• supplies by way of sale of real property
• supplies by way of sale of personal property by a municipality that is capital property of the municipality
• supplies by way of sale of designated municipal property of a person designated to be a municipality for the purposes of section 259 (the public service body rebate) that is capital property of the person

54. Generally, subsection 225(1) requires all amounts collected as or on account of tax to be included in calculating the net tax of a person, including a person who is not a registrant, and to report and remit such amounts in their return for their reporting period, which is generally the calendar month.

55. Similarly, subsection 129.1(1) deems taxable supplies made by a designated small supplier branch or division of a public service body to have been made by a non-registrant, except if the supply is any of the following:

• a supply by way of sale of real property
• a supply by way of sale of personal property by a municipality that is capital property of the municipality
• a supply by way of sale of designated municipal property of a person designated to be a municipality for the purposes of section 259 (the public service body rebate) that is capital property of the person

Input tax credits

56. A small supplier who is not registered, and is not required to be registered, for GST/HST purposes is not entitled to claim input tax credits (ITCs) to recover the GST/HST paid or payable on inputs.

57. Under paragraph 240(3)(a), a person who is a small supplier and engaged in a commercial activity in Canada can voluntarily register for the GST/HST. Before doing so, a person should be aware of the requirements and responsibilities of being registered. For more information, refer to GST/HST Memorandum 2-3.

58. When a person who is a small supplier becomes a registrant, it will be eligible to claim ITCs for the GST/HST paid or payable by the person on inputs as long as the legislative requirements for doing so are met. For detailed information on claiming ITCs, refer to GST/HST Memorandum 8-1, General Eligibility Rules.

59. There are special rules that may allow a small supplier who becomes a registrant to claim ITCs for the GST/HST paid or payable on certain property, services, and start up costs that were acquired before the effective date of registration but are for consumption, use, or supply in the course of its commercial activity on or after the date of registration. For more information about these rules, refer to GST/HST Memorandum 8-5, Becoming and Ceasing to Be a Registrant.

Collection of the GST/HST

60. Where a small supplier registers for GST/HST purposes and becomes a registrant, the person must meet certain legal obligations imposed under the ETA. Generally, the person must:

• charge and collect the GST/HST on taxable supplies (other than zero-rated supplies) they make in Canada
• file returns on a regular basis; and remit any net tax owing

61. For more information on collecting and remitting tax, refer to GST/HST Memorandum 3-1.

Further information