Running a business in Canada means keeping up with essential tax obligations. One of the most important responsibilities for business owners is filing taxes correctly and on time. For businesses that collect Goods and Services Tax (GST) or Harmonized Sales Tax (HST), filing GST/HST returns through the Netfile system is a key process.
This guide will provide an in-depth overview of how to file your GST/HST return using the Canada Revenue Agency’s (CRA) Netfile system, when to file, and how to ensure accuracy. With our expert help at Yeg Tax Masters, you’ll avoid penalties, file on time, and keep your tax obligations in check.
What is GST/HST?
In Canada, businesses are required to charge GST or HST on most goods and services they sell. The GST is a federal tax of 5%, while the HST combines GST and provincial sales tax, and it applies in certain provinces.
For businesses in Alberta, including Edmonton, GST is applicable, while businesses in provinces like Ontario and Nova Scotia charge HST.
These taxes operate on an input/output system. When your business makes a sale, you charge GST/HST to your customers (the output tax).
On your business purchases, you pay GST/HST (the input tax). When you file your GST/HST return, you calculate the difference between what you’ve collected and what you’ve paid. If you’ve collected more than you’ve paid, you’ll remit the difference to the CRA. If you’ve paid more, you may be eligible for a refund.
Understanding the Importance of GST/HST Netfile
The GST/HST Netfile system is an online service provided by the CRA that allows businesses to file their GST/HST returns electronically. It’s the easiest and fastest way to report your taxes and submit your return.
Why should you use GST/HST Netfile?
- Faster Processing: Returns are processed quickly—usually within seven business days.
- Instant Confirmation: The system gives you an immediate confirmation number as proof of filing.
- Convenience: File your GST/HST return online anytime, anywhere.
- Reduced Errors: The system helps minimize mistakes by automatically calculating some fields and providing prompts.
When Should You File Your GST/HST Return?
The CRA assigns each business a filing frequency when you register for GST/HST, based on your business’s revenue. Understanding your reporting period is crucial for avoiding late fees and penalties. At Yeg Tax Masters, we ensure our clients file on time and stay ahead of tax deadlines.
There are three filing periods:
- Monthly Filing
Businesses with higher revenues often report monthly. Your GST/HST return is due one month after the end of each month. For example, your January return is due by the end of February. - Quarterly Filing
Most small and medium-sized businesses report quarterly. Your return is due one month after the end of each quarter. So, for the first quarter (January to March), your return is due by the end of April. - Annual Filing
Some businesses file annually. Your GST/HST return is due by June 15 of the following year, but if you owe taxes, the payment is due by April 30.
How to File GST/HST Netfile: A Step-by-Step Guide
Filing your GST/HST return through the Netfile system is straightforward when you follow these steps:
- Log into CRA’s My Business Account
Start by logging into My Business Account on the CRA website. If you don’t have an account, Yeg Tax Masters can help you set one up using your Business Number (BN). - Access the GST/HST Netfile Section
In your My Business Account, navigate to the GST/HST section and click on “File a Return.” This will take you to the GST/HST Netfile form. - Complete the Required Information
You’ll need to enter key information:- Total Sales and Revenue (Line 101): This is the total revenue for the reporting period.
- Total GST/HST Collected (Line 103): The total amount of GST/HST collected from customers.
- Input Tax Credits (ITCs) (Line 106): The amount of GST/HST you paid on business expenses that you can claim back.
- Adjustments (Line 107): Include any adjustments, such as credits or refunds.
- Review Your Return for Accuracy
Ensure all your entries are correct to avoid delays or penalties. At Yeg Tax Masters, we review every detail to ensure accuracy. - Submit the Return and Get Your Confirmation Number
Once everything is correct, submit your return. The CRA will provide a confirmation number, which you should keep for your records.
If you ever feel uncertain about filing, let Yeg Tax Masters take care of it for you. We specialize in ensuring accurate and timely filings for businesses in Edmonton and across Canada.
Choosing the Right Accounting Method for GST/HST Filing
Choosing the appropriate accounting method is essential for accurate filings. Yeg Tax Masters can help you determine which method works best for your business.
- Standard Method
The most common method, where you calculate the total GST/HST collected and subtract input tax credits. This difference is what you remit to the CRA or claim as a refund. - Quick Method
Designed for small businesses, this method allows you to pay a fixed percentage of your sales instead of calculating input tax credits. It simplifies the filing process. - Simplified Method
This option also simplifies the filing process by calculating input tax credits based on a percentage of your total expenses.
How to Make Payments After Filing Your GST/HST Return
Once your return is filed, you’ll need to pay any taxes owed. Here’s how you can make payments:
- Online Banking
Add the CRA as a payee in your online banking system. Look for “Federal – GST/HST Payment – GST-P” and pay just like any other bill. - CRA My Payment
My Payment is a fast and secure way to pay directly from your bank account via the CRA website. - Pre-authorized Debit
Set up automatic payments through My Business Account to avoid missed payments. - In-Person Payments
Payments can also be made at financial institutions or Canada Post outlets.
What Happens If You File Late or Make Errors?
Filing late or making mistakes on your GST/HST return can lead to penalties or interest charges. Here’s what you should do:
- Late Filing Penalties
If you miss the deadline, the CRA charges penalties, starting at $250. Interest will also accrue on any unpaid amounts. - Correcting Errors
If you made a mistake, you can request an adjustment through My Business Account. Yeg Tax Masters can assist you in making corrections and preventing further issues. - Filing Adjustments or Claiming Rebates
You may be eligible for rebates or credits if you overpaid your taxes. At Yeg Tax Masters, we ensure you claim all eligible rebates.
Common Questions and Issues with GST/HST Netfile
Is the GST/HST Netfile system secure?
Yes, the CRA’s Netfile system uses high-level encryption to protect your information.
How long does processing take?
Typically, the CRA processes Netfile returns within seven days.
What if I have no sales or revenue to report?
You still need to file a nil return. At Yeg Tax Masters, we can help you file even if you have zero revenue for the reporting period.
Conclusion
Filing your GST/HST return through the CRA’s Netfile system is one of the most efficient ways to handle your business taxes in Canada. However, it’s essential to stay organized, file on time, and choose the right filing method to avoid penalties.
At Yeg Tax Masters, we specialize in tax accounting for businesses in Edmonton and across Canada. Whether you need help with filing, choosing the right accounting method, or managing payments, our team handle everything smoothly. For help contact Yeg Tax Masters at 780-691-3982 or via email at info@yegtaxmasters.com.
