GST/HST is one of the most operationally complex taxes Canadian businesses deal with — not because the rate is high, but because the rules around registration, place of supply, exempt vs. zero-rated supplies, and input tax credit recovery contain more nuance than most business owners realise. Several developments in 2024–2025 have changed the landscape in ways that affect a broad range of industries. Here's what to know.
1. The Temporary GST/HST Holiday — What It Covered and What Comes Next
The federal government's temporary GST/HST exemption — which applied to a specified list of consumer goods from December 14, 2024, to February 15, 2025 — was administratively complex for retailers. Businesses that sell qualifying goods (children's clothing, selected foods, restaurant meals, children's toys, books and more) had to implement the zero-rating mid-stream, then reverse it. CRA issued supplementary guidance to clarify transitional rules for deposits, gift cards, and layaways, but many businesses still face questions about how to report the impacted periods. If your business was affected and you're uncertain about the GST/HST treatment of any transactions during that window, get it reviewed before you file.
Categories that were temporarily zero-rated:
- Children's clothing and footwear
- Children's diapers and car seats
- Qualifying food and beverages (excluding alcohol)
- Restaurant meals (dine-in and take-out)
- Children's toys and games
- Books, print newspapers, and audiobooks
- Christmas trees
- Video game consoles, controllers, and physical game media
2. New Housing Rebates — Expanded Scenarios
The federal government has made several changes to the GST New Housing Rebate and the GST/HST New Residential Rental Property Rebate (NRRPR) following the 2023 fall economic statement. Purpose-built rental housing — including apartment buildings and co-operative housing — now qualifies for the NRRPR at a much broader scale, with the full 100% rebate of the 5% federal portion available on qualifying projects. For Ontario, the provincial portion of the rebate has also been subject to provincial announcements. If you're a developer, investor, or builder with a project that broke ground after September 14, 2023, confirming whether you qualify for the enhanced rebate is a significant financial exercise worth doing immediately.
Builder's note on substantial completion
The date of 'substantial completion' or first occupancy is the key date for rebate eligibility — not the sale date or closing date. Projects where substantial completion falls in the post-September 2023 window should be reviewed for enhanced rebate eligibility regardless of when construction started.
3. Short-Term Rental Platforms and HST
The 2024 federal budget confirmed that digital economy platform operators — including short-term rental platforms — are required to collect and remit GST/HST on behalf of their Canadian suppliers where those suppliers are not registered. This affects property owners who list on Airbnb, VRBO, and similar platforms. The platform collects and remits GST/HST on qualifying rentals, but the property owner still needs to understand their own registration status, the interaction with the principal-residence exemption for income tax purposes, and whether ITC recovery is available on property expenses. Many hosts have unknowingly been in a grey zone since the rules changed — a quick review is advisable.
4. Input Tax Credit Recovery — Common Gaps
In our experience reviewing client accounts, ITCs are the most consistently under-claimed area in HST compliance. Businesses routinely miss credits on home-office expenses, mixed-use vehicles, business meals (50% recoverable), dues, subscriptions and cloud software tools. The CRA's documentation requirements for ITCs — including supplier GST/HST registration numbers and invoice thresholds — are strict, and inadequate records can result in credits being reversed on audit.
ITC categories frequently missed or under-claimed:
- Home-office expenses — the portion used for business purposes
- Vehicle expenses — the business-use percentage of all operating costs
- Meals and entertainment — 50% of the HST is recoverable
- Cloud subscriptions, SaaS tools, and professional software
- Business insurance — often treated as exempt when it may qualify
- Leasehold improvements on commercial premises
5. HST on Employee Benefits
Employers that provide taxable benefits to employees — company vehicles, parking, group life insurance, certain housing allowances — may be required to remit HST on the deemed supply of those benefits. This is an area the CRA examines closely on employer audits. The calculation is different from the benefit reported on the T4, and many payroll systems don't handle it automatically. If your business provides taxable benefits, confirm your HST obligations are being calculated and remitted correctly.
6. The $30,000 Threshold — Still the Most Commonly Missed Rule
Every year, CRA discovers businesses that have been operating above the $30,000 small-supplier threshold without registering for GST/HST. The consequences are serious: the CRA can assess the full unremitted tax for up to four years, and penalties and interest compound quickly. If your revenue has been growing and you haven't confirmed your registration status recently, do it now. Registration is straightforward; catching up on unremitted amounts through a voluntary disclosure is far better than waiting for an assessment.