Small supplier limit calculation for charities and public institutions

As a charity or public institution, you may qualify as a small supplier under either of the following tests:

• the $250,000 gross revenue test; or
• the $50,000 annual taxable supplies test.

You only have to meet one of these tests to be a small supplier.

Gross revenue test

The annual limit for the gross revenue test is $250,000. When calculating your gross revenue for this test, you do not have to determine if the goods and services you sell or provide are subject to GST/HST.

• If you are in your first fiscal year, you do not have to register for GST/HST.
• If you are in your second fiscal year, calculate your gross revenue from your first fiscal year. If this amount is $250,000 or less, you do not have to register (regardless of your total revenue from taxable goods and services); or
• If this is your third or more fiscal year, calculate your gross revenue in each of your two previous fiscal years. If this amount is $250,000 or less in either of these years, you do not have to register, (regardless of your total revenue from taxable goods and services).

Gross revenue includes business income, donations, grants, gifts, property income, and investment income, less any amount considered a capital loss for income tax purposes.

Whether you are incorporated or unincorporated, you have to use the gross revenue of your organization as a whole (the legal entity) to determine if you qualify as a small supplier under this test.

$50,000 annual taxable supplies test

In your calculation to determine if you are a small supplier, you have to include your worldwide revenues from your sales of goods and services that are subject to GST/HST, which includes zero-rated sales and supplies. You also have to include revenues of any of your associates. You have to exclude financial services, goodwill, and sales of capital property. The following three examples explain how to calculate the limit to determine if you are a small supplier.

Example 1

Your charity or public institution started making taxable supplies of goods and services in January 2008 and made the following sales throughout that year:

Because you did not exceed the $50,000 limit in the four consecutive calendar quarters, you are considered a small supplier throughout 2008, the first quarter of 2009, and the month of April 2009. At the end of every quarter, you have to make the same calculation to determine if you are still a small supplier.

Example 2

This example shows what happens when you exceed the $50,000 limit at the end of four consecutive calendar quarters:

• you cease to be a small supplier at the end of the following month (end of April 2009) as you exceeded the $50,000 limit in the last four consecutive calendar quarters;
• you have to start collecting GST/HST in May 2009; and
• you have 30 days after the day you first make a sale other than as a small supplier to apply to be registered.

In this particular case, if you make a sale other than as a small supplier on May 5, you have to register before June 4.

Example 3

This example explains what happens if you exceed the $50,000 limit in one particular calendar quarter:

• you cease immediately to be a small as you exceeded the limit in one particular calendar quarter;
• you have to charge the tax on the sale that made you exceed the limit even if you are not yet registered; and
• you have 30 days after the day you make the sale that made you exceed the small supplier limit to apply to be registered.

In this particular case, if you made the sale that exceeds the small supplier limit on September 23, you have until October 22 to register.

Forms and publications

• Guide RC4022, General Information for GST/HST Registrants
• GST/HST Memoranda Series Chapter 2.2, Small Suppliers
• Booklet RC2, The Business Number and Your Canada Revenue Agency Program Accounts
• Form RC1, Request for a Business Number (BN)
• Form RC1A, Business Number (BN) - GST/HST Account Information
• Form RC59, Business Consent Form
• Form GST469, Direct Deposit Request (Non-Personalized)

Related topics

• Business Registration On-line
• Canada Business
• Related provincial and territorial government sites
• Canada's Business and Consumer Site