CRA GST HST business account: number and bank documents

What to take away

When the CRA requires a GST/HST registration and a business number

Most small Canadian businesses meet the CRA business number before they meet a bank account. The business number is a nine-digit identifier the Canada Revenue Agency issues to a business for its dealings with the agency. It is not a tax by itself. It is the container.

GST/HST registration adds a program account to that container. The statutory basis sits in the Excise Tax Act, which imposes the goods and services tax and the harmonized sales tax and sets out who must register.

A business that registers gets a GST/HST account number, files returns, and charges tax on taxable supplies.

Registration becomes mandatory when a business exceeds the small supplier threshold over four consecutive calendar quarters, or in a single calendar quarter. The threshold is measured on taxable supplies, not profit, and not on what lands in the bank. Under section 148 of the Excise Tax Act, the small supplier limit is $30,000 of taxable supplies, or $50,000 for a public service body.

A business that crosses it must register and start charging GST/HST, which the CRA explains in its guidance on when to register for and start charging the GST/HST.

Sole proprietors, partnerships and corporations all follow the same registration rule. The difference is the paperwork. A corporation gets its business number through federal or provincial incorporation, while a sole proprietor registers directly with the CRA. Either way, the GST/HST program account is what banks look for later.

There are two registration routes. Registering online through Business Registration Online (BRO) is the CRA's fastest route for a business number and a GST/HST account. The paper route is Form RC1, Request for a Business Number and Certain Program Accounts, which registers a business for a business number and CRA program accounts such as GST/HST, payroll and corporate income tax. Directors, partners and trustees with a temporary Social Insurance Number beginning with 9 can only register for a GST/HST account using Form RC1.

Voluntary registration is allowed below the threshold in many cases. A business that registers voluntarily can claim input tax credits on purchases, which matters if it buys a lot of taxable supplies. It also takes on filing obligations from the moment it registers, whether or not it has revenue.

Some supplies are exempt, such as most health care and residential rent. Others are zero-rated, such as basic groceries and exports. A business that only makes exempt supplies generally cannot register. This distinction is worth settling before you fill in a bank form, because the bank will ask what the business does.

A business with no permanent establishment in Canada but carrying on business here faces different registration rules. Non-resident businesses often must register regardless of revenue and must post security in some cases. That is a separate track from the domestic small supplier test.

What a bank asks for when it sees a GST/HST number on an application

A bank is not the CRA. It does not verify your tax filing or your remittance history. It collects the business number and GST/HST account number because account opening rules require it to identify the business, its owners and its activity. The number is evidence the business exists and is registered.

Under the Bank Act and related rules, federally regulated banks must verify the identity of a business before opening an account. In practice that means a certificate of incorporation or a business registration document, plus the business number. FINTRAC rules push the same information into the file from the anti-money-laundering side.

A bank will usually ask for the legal name, the operating name, the address, the nature of the business, and the owners or signing officers. If the business is a corporation, it may ask for a beneficial ownership declaration. That mirrors federal incorporation requirements under Innovation, Science and Economic Development Canada.

A GST/HST number on an application tells the bank the business sells taxable supplies. That affects how the bank reads expected deposits. A business that charges GST/HST collects money it does not own, and the bank may treat that flow differently from ordinary revenue when it sets account limits or holds.

Credit unions operate under provincial regulators, not the Bank Act. In Ontario that is the Financial Services Regulatory Authority of Ontario, and in Quebec the Autorité des marchés financiers. Deposit insurance differs too: provincial credit unions are covered by provincial schemes, not by the Canada Deposit Insurance Corporation.

A GST/HST number is requested in both cases, but the account rules are not identical.

Here is the short version of what a bank file usually needs:

In document terms, that list usually becomes:

If the account will also take card payments, the merchant account vs payment facilitator choice decides which of these documents the payment provider asks for a second time. Banks rarely accept a verbal answer in place of a document, even for a small sole proprietorship.

Most banks open a business account only after the business number exists. That order matters: register with the CRA first, then apply. A bank that opens an account for an unregistered business may impose conditions, and it will still ask for the number later.

Reading a GST/HST account number and confirming it with the CRA

The GST/HST account number is not a random string. It begins with the nine-digit business number, then a two-letter program identifier, then a four-digit reference number. The program identifier for GST/HST is RT. So the full number looks like nine digits, RT, then four digits.

That structure is useful when you are filling in forms. If a bank form asks for the business number, give the nine digits. If it asks for the GST/HST account number, give the full number including RT and the reference digits. Mixing the two up causes delays, especially when a form validates length.

The reference number matters when a business has more than one GST/HST account, which happens with branches or divisions. Each account has its own reference number and its own filing obligations. A bank that records the wrong reference number may attach deposits to the wrong account profile internally.

Confirmation is the step most businesses skip. The CRA's online GST/HST Registry tells you whether a number is registered and valid. A search needs the GST/HST account number, the business name and a transaction date; the name is the supplier's legal, operating or trading name as shown on an invoice or a sign at the place of business. When a supplier does not provide its number, the CRA's business enquiries line at 1-800-959-5525 can confirm whether it is registered. Banks, suppliers and counterparties use the registry to check a number before they rely on it.

You can use it on your own number to catch a transcription error.

Confirmation is not the same as a clearance certificate. A clearance certificate relates to a specific transaction, usually the sale of a business or real property. Confirmation simply answers whether the number is live. Both exist because a number can be cancelled, and a cancelled number still looks like a number.

Once registered, you manage the account through CRA My Business Account. That is where you update addresses, add program accounts, view balances and file returns. The CRA's guidance on getting a GST/HST number and managing your account covers registration and the online services that follow it.

If you lose the number, do not guess. Retrieve it through CRA My Business Account or by calling the business enquiries line. A bank will not accept a reconstructed number, and a wrong number on a deposit slip can send a payment into a reconciliation problem.

Changing an account: what the CRA expects you to update and when

Registration is not a one-time event. The CRA expects you to tell it when the facts behind the account change. The common triggers are a change of address, a change of legal name, a change of ownership, closing a business, or adding or dropping a program account.

An address change is the one banks notice first. If the CRA has an old address, notices and reassessments go to the wrong place, and a business can miss a filing deadline without knowing. Update the CRA and the bank in the same week so correspondence and statements agree.

A change of ownership is more serious. When a business changes hands, the GST/HST account generally does not transfer as a matter of course. The buyer usually registers a new account, and the seller closes or amends the old one. Banks treat this as a new relationship and will re-run identification checks.

Adding a partner or incorporating a sole proprietorship changes the legal entity. The business number may stay, but the GST/HST registration details change. Banks often require a new account application when the legal entity changes, even if the operating name and the people are the same.

Closing an account has its own sequence. You file a final return, remit what is owed, and then close the program account. If the business keeps operating but stops making taxable supplies, it may be able to cancel registration. Cancelling does not erase past filing obligations.

When you change banks, the CRA side does not change. What changes is the pre-authorized debit or the account you remit from. Update the banking information in CRA My Business Account before the next filing period, or a payment can fail and trigger interest.

A business checking requirements review is worth doing at the same time, because account changes often expose gaps in signing authority and document retention. Banks ask for updated resolutions when signatories change, and the CRA asks for updated ownership information.

Filing, remitting and penalty exposure that touches account activity

Filing frequency is assigned by the CRA based on revenue. A small business usually files annually, quarterly, or monthly. The assigned frequency is not optional, and missing a period creates a gap that interest fills.

The GST/HST filing penalties the CRA can levy start with a failure to file on time. The penalty is a percentage of the net tax owing, and it grows with repeated failures. Interest compounds on top.

There is also a penalty for failing to file electronically when required. Larger businesses must file by electronic means, and paper filing when it is not permitted carries its own charge. The threshold is based on revenue and on whether the business is a specified filer.

Gross negligence and wilful non-compliance attract heavier penalties. These are not administrative slips. They involve knowingly false statements or deliberate failure to file, and they can lead to prosecution under the Excise Tax Act.

Penalties do not come out of the bank account automatically. They sit as a balance on the CRA account until paid or offset against a refund. That is why a business can be surprised: a refund it expected is applied to an old penalty instead of landing in the bank.

Input tax credits are the other side of filing. A business claims them for GST/HST paid on taxable purchases. If a return is not filed, the credits are not released, which ties up cash that would otherwise fund operations.

A payment account used for tax remittances should be separate from operating cash where possible. Mixing collected GST/HST with working capital makes it easy to spend money that belongs to the CRA, and the shortfall shows up at filing time. A payment account holds money that is only passing through, which is exactly what collected tax is.

Rate differences by province and what they mean for deposits

The rate you charge depends on where the supply is made, not where your bank is. That is why provincial rate differences show up in deposit patterns. A business selling across Canada collects different amounts on the same invoice value depending on the destination.

Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island use the harmonized sales tax, so one rate applies to both federal and provincial portions. Quebec administers its own sales tax, and the CRA administers the GST portion under an agreement. British Columbia, Alberta, Saskatchewan and Manitoba use the GST plus a separate provincial sales tax.

Alberta has no provincial sales tax, so a sale into Alberta carries the GST only. The federal GST itself is set by section 165 of the Excise Tax Act at the rate of 5% on the value of the consideration for a taxable supply made in Canada. That is a real difference for a business pricing nationally. The same good can carry a different total tax load depending on the province of the buyer.

Territories follow the GST with no separate territorial sales tax. Yukon, the Northwest Territories and Nunavut are not exempt from GST, and supplies made there are taxed under the same federal rules. Remote location does not change the rate.

Place-of-supply rules decide which province's rate applies. For goods, it is generally where the goods are delivered. For services, it is generally where the recipient is located. Getting this wrong means collecting the wrong amount, and the difference comes out of the business, not the customer.

Here is how the two structures compare in practice:

Deposits reflect this. A business with customers in several provinces sees varying tax amounts on similar invoices, and its bank statements show the total collected, not the split. Reconciliation means matching the GST/HST portion to the return, not to the deposit total.

If you are setting up the account structure that handles this, keep three flows apart from the start: the tax you collect, the operating account, and the remittance to the CRA. The CRA expects the tax you collect to be traceable, and a clean account layout makes that easy.

Common questions