Does incorporating my Ontario business change my GST/HST obligations?

GST/HST is a federal obligation under the Excise Tax Act and is separate from corporate income tax. Incorporating does not automatically change whether you must register — the rules look at taxable supplies, not your business structure. A business must register for GST/HST once its total taxable revenues exceed the small supplier threshold of $30,000 in a calendar quarter or over four consecutive quarters.

If you were already registered as a sole proprietor and you incorporate, the new corporation is a different legal entity and generally must obtain its own GST/HST registration number. Outstanding balances, input tax credits, and filing obligations from the sole proprietorship do not automatically transfer to the new corporation.

Some elections exist — for example, a section 167 election can treat a business asset transfer on incorporation as occurring at nil consideration for GST/HST purposes, avoiding tax on the transfer. These elections are time-sensitive and must be filed correctly. Plan the incorporation with an accountant who can identify which elections apply and file them with the CRA on time.