GST/HST Reporting Period vs Fiscal Year-End: Which Applies

Which GST/HST reporting period applies to my business?

Your reporting period is how often you file: annual, quarterly or monthly. Your fiscal year is the 12 months an annual return covers. The CRA sets the period from the taxable sales of your previous fiscal year, counting those of associated businesses too. Each business's sales are annualized: divided by the days in that year, then multiplied by 365, so a short year can set a more frequent period than its actual sales suggest. Associated generally means one controls the other, or both are associated with the same third person (CRA; CRA RC4022; Excise Tax Act s. 249).

The test also runs during the year. If your taxable sales so far this fiscal year, with those of associated businesses, pass a ceiling, you must move up a period. An annual filer whose sales pass $1,500,000 reports quarterly from the second fiscal quarter if the first quarter's sales passed it, from the third if the first two did, and otherwise from the next fiscal year. Passing $6,000,000 moves you to monthly filing from the fiscal quarter after the one in which your sales to date pass it. An annual filer who moves mid-year files a short return for the part of the year before the change, due 1 month after that part ends, and the CRA asks you to call and report the change (CRA RC4022; s. 245(2); s. 248; s. 249; s. 238(1)).

Zero-rated sales made in Canada count toward these amounts. Exempt sales, sales made outside Canada, zero-rated exports and goodwill, among others, do not (CRA RC4022). A new registrant is generally assigned an annual period; see when to register for GST/HST. This page is for businesses outside Quebec: Revenu Québec generally administers GST/HST for businesses located in Quebec. It also leaves out listed financial institutions and charities, whose periods and deadlines can differ (s. 245(2); s. 238(1)).

The case stops being simple when:

• the year-end is not December 31;
• an associated business pushes combined sales over a ceiling;
• the corporate year-end has changed;
• a return was filed for the wrong period, or a period was never filed;
• invoices or payments cross a period end, so the books and the CRA balance disagree.

Gather your periods and due dates from your CRA account, the year-end, taxable sales for the last fiscal year and the current year to date (yours and any associated business's), and the invoice and payment dates in the last days of each period.

When is my return due if my year-end is not December 31?

A monthly or quarterly return and its payment are due 1 month after the period ends: a month ending July 31 is due August 31, and a quarter ending March 31 is due April 30. A quarterly filer with a December 31 year-end and calendar quarters files and pays by April 30, July 31, October 31 and January 31. An annual return is due 3 months after the fiscal year-end, whatever month that is. If the date is a weekend or CRA-recognized holiday, receipt on the next business day is on time (CRA).

The June 15 return date is for an individual whose fiscal year is the calendar year and who carried on a business. Payment is still due April 30 (Excise Tax Act s. 238; s. 228). A partnership, which is not an individual, follows the 3-month rule, and so does an individual who elected a non-calendar business fiscal period. The Act says "carried on a business"; the CRA's page says "business income for tax purposes". With a loss, no income or only rental income, confirm your dates in your CRA account.

Quarters and months sit inside one fiscal year: the first begins on its first day and the last ends on its last day (s. 243). With a non-December year-end, a quarterly filer's quarters follow the year-end, not January. Read the exact periods in your CRA account.

Which period does an invoice belong to?

For most businesses, the GST/HST on a sale goes in the period holding the earlier of the day you are paid and the day payment is due. Payment is due on the earliest of three days: the day you first issue the invoice or the date printed on it, whichever is earlier; the day you would have invoiced but for an undue delay; and a payment date in a written agreement (s. 168; s. 152). The delivery or completion date does not decide the period, except for the goods row in the table and the special cases after it. Neither does the day the cash arrives if an invoice came first.

The CRA gives the same rule: tax on an invoice issued before payment belongs in the period holding the invoice date, even if you have not collected it (CRA RC4022).

The goods row comes from s. 168(3); for goods on approval, consignment or sale-or-return terms, the month that counts is the one in which the customer takes ownership or resells them. The stages row from s. 168(2). Long construction contracts, holdbacks, sales of real property, and leases and licences under a written agreement have their own timing (s. 168; s. 152(2)); for construction see construction holdbacks and subcontractors.

Under this rule, an invoice issued and dated December 30 and paid January 10 falls in the December period and, for an annual filer with a December year-end, in that year's return. Work finished December 30 and invoiced January 2 falls in January, unless the delay was undue or an earlier payment date applies. Dating an invoice January 2 but issuing it December 30 does not move it to January.

Books that record revenue when work is done can differ from a return that follows invoice dates. Before each period end, list the invoices dated in its last days and match the GST/HST payable balance to the return. For deposits and unpaid invoices, see GST/HST on deposits and unpaid invoices. For return lines, see filing GST/HST and input tax credits. For a return already filed for the wrong period, see correcting a filed GST/HST return.

Can I move to monthly, quarterly or annual filing?

You can elect a more frequent period. For a less frequent one, the Act and Form GST20 test your threshold amount (annualized sales of the previous fiscal year, with associates') against the ceiling of the period you choose: $6,000,000 for quarterly, $1,500,000 for annual (s. 247(1); s. 248(1)). A fall in sales is not a separate condition there, so a voluntary move to monthly can be reversed. The CRA's account-change page words it as a fall below the assigned period's thresholds after 12 months (CRA), so confirm what the CRA will accept in your case. Use the election service in your CRA account or Form GST20.

An election generally takes effect on the first day of a fiscal year and must be filed within 2 months after that day. The window is 3 months when a quarterly filer elects annual filing (s. 250; s. 248). Two exceptions: an annual filer pushed out of annual filing at the start of a fiscal quarter may elect monthly filing from that quarter's first day (s. 246(2)), and a new registrant elects with the registration application, or by the registration's effective date if that is later. Otherwise do not assume a mid-year switch is available for an election you choose; the required move follows its own timing.

Can I use my own accounting periods instead of calendar months or quarters?

Yes, if the CRA approves them before the first day of the fiscal year they relate to. Ask in your CRA account or on Form GST71, and repeat the request each fiscal year. If you do not, the CRA assigns months and quarters (calendar ones, in its words), and you wait until the next fiscal year to choose (CRA RC4022). They must still fit inside the fiscal year (s. 243), so read your assigned periods in your CRA account.

The usual limits:

• A fiscal month is 28 to 35 days, except that the first and last month of a quarter can be shorter.
• A fiscal quarter is 84 to 119 days, except that the first and last quarter of the year can be shorter.
• You can apply for one fiscal month per quarter longer than 35 days.

What is the GST/HST fiscal year, and can I change it?

The GST/HST fiscal year is usually your income tax year, but a corporation with a non-calendar tax year can elect to use calendar years instead (CRA RC4022). Individuals, and partnerships with an individual member, generally have calendar years, although an individual or trust whose business, or whose partnership's business, has a different fiscal period can elect to use it, effective on that period's first day and filed by then (s. 244(2)).

The calendar-year election:

• takes effect on January 1 and must be filed with the CRA on or before that day;
• can be revoked only from the first day of a taxation year that begins more than one year after the election took effect, and the revocation must be filed on or before that day (s. 244);
• is made in your CRA account or on Form GST70.

The election changes your filing dates and creates a short year, so check the new dates before you make it. A corporation that uses a non-calendar year for both income tax and GST/HST should tell the CRA promptly when it changes its income tax year, so the CRA can change the GST/HST fiscal year to match. Without a calendar-year election, the fiscal year is the income tax year, so a deemed income-tax year-end, such as one caused by an acquisition of control, ends the GST/HST fiscal year too (s. 123(1); Income Tax Act s. 249(4)). Whether the two years must match is covered in choosing or changing a year-end.

What periods do I file after I change my fiscal year?

Changing the fiscal year creates a short fiscal year. The time from the start of the old year to the day before the new year starts is treated as a fiscal year, with its own return (CRA Policy Statement P-068). An annual filer's return for the short year is due 3 months after it ends. A quarterly or monthly filer's periods for the short year must fit inside it (s. 243), and the last one ends the day before the new year starts. If you use your own accounting periods, ask the CRA to approve them before the short year begins. The next year's reporting period is tested on the short year's sales annualized (s. 249(1)).

A revocation works the same way: the period from the start of the year to the day before the revocation takes effect is a fiscal year. P-068 is an old policy statement and the CRA notes it may not reflect later law, so confirm the periods in your CRA account after any change.

Do annual filers owe quarterly instalments?

An annual filer must pay quarterly instalments when net tax (generally the GST/HST collected or collectible, less input tax credits and adjustments) was $3,000 or more in the previous fiscal year and is $3,000 or more in the current one (CRA; CRA instalment test; s. 237(2) and (3)). Each instalment is due within 1 month after the end of each fiscal quarter. It is usually a quarter of the previous year's net tax, or you can base it on an estimate of the current year (s. 237; CRA). After a short first year, annualize its net tax (divide by the days registered, multiply by 365): instalments can be due the next year even if the actual net tax was under $3,000 (CRA RC4022; s. 237(2)). The same annualizing applies to the short return when annual filing ends mid-year.

For a December year-end the dates are April 30, July 31, October 31 and January 31. The instalment calculator in your CRA account shows your own dates (CRA). If you base instalments on an estimate and it falls short, the CRA charges instalment interest on the difference.

Where do I see my assigned period and due dates, and what if they differ from what I expected?

Your CRA account shows your reporting periods and due dates (CRA).

When the CRA's periods differ from yours, check:

• Sales of associates. Their taxable sales count toward your ceilings.
• Sales so far this year. They can move you up a period before the year ends.
• A changed year-end. A fiscal-year change creates a short year and new due dates.
• A new registration. A new registrant's first period can be split in two around the registration date (s. 251).

A registrant must file for every period, even with nothing to report. For periods that went unfiled, see missed nil GST/HST and PST returns; for the penalty, see the late GST/HST filing penalty.

Example

All amounts are in Canadian dollars.

Annual filer with an August 31 year-end

A corporation has an August 31 fiscal year-end, files annually and made C$400,000 of taxable sales in the year. Its return and payment are both due November 30.

Later it files an election, on or before January 1, for calendar years to start that day (its income tax year does not change). The September 1 to December 31 stretch is a short fiscal year, with a return due March 31. The next return covers January 1 to December 31 and is due the following March 31. If the 122-day short year had C$130,000 of taxable sales, the CRA tests the calendar year's reporting period on C$130,000 × 365 ÷ 122, about C$388,934.

Sole proprietor with a December 31 year-end

A sole proprietor with C$90,000 of business sales files annually. Any balance for the year is due April 30, and the return is due June 15. Filing on June 15 does not move the April 30 payment date.

Quarterly filer, invoice across a quarter-end

A quarterly filer with calendar quarters issues an invoice dated September 28 for C$20,000 plus C$1,000 of GST (5%). The client pays October 20. The invoice date came first, so the C$1,000 goes on the July to September return, due October 31. The same job invoiced on October 2 goes on the October to December return, unless the delay was undue.

Different for you?

• A return was filed for the wrong period or with errors: see correcting a filed GST/HST return, and get bookkeeping help to rebuild which sales belong in which period.
• The corporate year-end changed or may change: see choosing or changing a year-end. Changing the GST/HST fiscal year too creates a short year, so check the new periods and due dates before you elect, with bookkeeping help if the books are not ready for a split year.
• Invoices straddle a period end and the books no longer match the CRA balance: see reconciling GST/HST payable to the CRA, or for a corporation the year-end close checklist. If the difference stays, get bookkeeping help to rebuild which sales belong in which period.
• Periods went unfiled: see missed nil GST/HST and PST returns, unfiled returns and estimated assessments and the late-filing penalty. Catching up several periods starts with bookkeeping help for the missing records.
• Your business is located in Quebec: Revenu Québec generally administers the GST/HST there, so the CRA account and steps on this page usually do not apply. Confirm your periods, forms and due dates with Revenu Québec; see filing GST/HST and input tax credits for how Quebec filing works.