CRA GST/HST Deregistration Rules: A Simple Guide for Small Businesses in Canada

For many Canadian businesses, registering for a Goods and Services Tax (GST) or Harmonized Sales Tax (HST) account is a necessary step in running operations. But what happens if your business changes and you no longer need to stay registered? Understanding when to deregister can save you time, money, and unnecessary filing obligations.

When to Deregister

You may be required—or choose—to deregister your GST/HST account if:

1. Your business closes. If you stop operating, you must close your GST/HST account with the Canada Revenue Agency (CRA).

2. You no longer meet the threshold. Businesses earning less than $30,000 in total taxable revenues over four consecutive calendar quarters are considered small suppliers. If you fall below this threshold, you may choose to close your account.

3. You sell or transfer your business. When ownership changes, the previous owner must close the existing account, and the new owner will need to determine their registration requirements.

4. You switch business structure. If you incorporate, merge, or change your legal entity, you may need to deregister under the old account and re-register under the new one.

Why It Matters

Deregistering at the right time ensures you aren’t stuck filing returns or collecting/remitting GST/HST unnecessarily. It also prevents penalties assessed on missed filings after your business no longer has any GST/HST requirements.

Before deregistering, make sure you’ve:

• File all outstanding GST/HST returns.

  Even if you’re planning to close your account, you still have to file any GST/HST returns for the periods you were registered. For example, if you collected GST/HST on sales in the last quarter, you need to report that to the CRA. Think of it as finishing your “homework” before you’re allowed to leave the class.

• Remit any amounts owing

  If you collected GST/HST from your customers but haven’t yet sent it to the CRA, you must pay it before you can close your account. The CRA views that tax as money held “in trust,” so it has to be handed over. Not paying it could lead to fines, interest, or legal action.

• Accounted for your business assets

  This one is often overlooked. If your business still owns assets (like equipment, supplies, or inventory) when you deregister, the CRA may treat it as if you “sold” those items to yourself. That means you may need to charge GST/HST on their fair market value and include it in your final return. For example, if your company laptop is worth $1,000, you may have to account for GST/HST on that amount.

The Bottom Line

Knowing when to deregister helps simplify your business obligations and keep you compliant with CRA rules. If you’re unsure about timing or the process, professional guidance can make it easier.

📧 For help with GST/HST registration or deregistration, contact us at info@kliuaccounting.com or book a call today.

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