Expanding your business into Canada or launching a startup there? That’s an exciting move. But before you can invoice clients, hire employees, or collect taxes, there’s an important step you can’t skip—registering your business with the Canada Revenue Agency (CRA).
The CRA is Canada’s federal tax authority, and registering with it is essential for staying compliant with local tax laws. Whether you’re setting up a corporation, a sole proprietorship, or anything in between, understanding how to set up your tax accounts properly will save you time, money, and unnecessary stress.
In this guide, we’ll break down the process of registering with the CRA, explain what types of tax accounts you may need, and show you how to stay on top of your obligations from the start.
Step 1: Know Your Business Structure
Before you register with the CRA, you need to determine your business structure. In Canada, your structure affects how your business is taxed and reported.
Common business types include:
-
Sole proprietorship: Owned by one person, taxed as personal income.
-
Partnership: Owned by two or more people, income flows through to partners.
-
Corporation: A separate legal entity, taxed separately from its owners.
If you’re a foreign entrepreneur, setting up a Canadian corporation is the most common route. You’ll first register your company in Canada either at the federal level (with Corporations Canada) or provincially (e.g., with Ontario, British Columbia, etc.), depending on where and how you plan to operate.
Once your business is legally formed, you can move on to CRA tax registration.
Step 2: Apply for a Business Number (BN)
The CRA assigns a Business Number (BN) to every business that registers with them. This is a unique 9-digit number that identifies your business across all federal programs. Think of it as your business’s tax identity.
You’ll need a BN to open any CRA program accounts, including:
-
GST/HST (Goods and Services Tax / Harmonized Sales Tax)
-
Payroll deductions
-
Corporate income tax
-
Import-export accounts
How to register for a BN:
You can apply:
-
Online via the CRA’s Business Registration Online (BRO)
-
By phone at 1-800-959-5525 (for businesses inside Canada)
-
Through a service provider or accountant
-
By mail or fax using Form RC1
To register, you’ll need:
-
Your legal business name
-
The business structure and registration details
-
Your address and contact information
-
A description of your business activities
-
The fiscal year-end of your business
Step 3: Set Up the Right CRA Program Accounts
Once you have your Business Number, you can add different CRA program accounts depending on your activities.
1. GST/HST Account (RT)
If your total taxable revenues exceed CAD 30,000 in a single calendar quarter or over four consecutive quarters, you must register for a GST/HST account.
If your revenue is below the threshold, registration is optional—but voluntary registration allows you to claim Input Tax Credits (ITCs) for GST/HST paid on business expenses.
2. Payroll Deductions Account (RP)
Planning to hire employees? You must set up a Payroll Deductions Account to remit:
-
Income tax withholdings
-
Canada Pension Plan (CPP) contributions
-
Employment Insurance (EI) premiums
You must also file regular reports and issue T4 slips to your employees at year-end.
3. Corporate Income Tax Account (RC)
Corporations in Canada must file an annual T2 corporate income tax return and make tax payments through their RC account.
You’ll receive a filing reminder from CRA after your registration, but it’s your responsibility to know your due dates and comply with corporate tax rules.
4. Import-Export Account (RM)
If your business plans to import goods into Canada or export goods internationally, you’ll need an RM account with the CRA. This allows your business to clear goods through customs and fulfill trade compliance obligations.
Step 4: Keep Your CRA Information Up to Date
Once you’re registered, keeping your business info current with the CRA is just as important. You should notify CRA of any changes to:
-
Your business address
-
Your fiscal year-end
-
Changes in ownership or structure
-
The cancellation of a tax account
CRA correspondence will go to the address on file, and outdated information can lead to missed notices or compliance issues.
Step 5: Know Your Filing and Payment Obligations
Each CRA tax account has different reporting schedules. It’s important to track deadlines so you stay compliant.
For example:
-
GST/HST: File monthly, quarterly, or annually (based on your revenue or choice)
-
Payroll: File remittance forms and pay deductions monthly or more frequently
-
Corporate Tax: File within six months of your fiscal year-end, with payments due within two or three months
Using an accountant or tax software can help you automate reminders and ensure nothing slips through the cracks.
Conclusion
Registering your business with the CRA is a crucial part of starting or expanding your company in Canada. From securing your Business Number to setting up the correct tax accounts, each step ensures that your business operates legally and efficiently.
By taking the time to understand your obligations now, you’ll avoid penalties later and build a strong foundation for your success in the Canadian market. Whether you’re a Canadian resident or an international entrepreneur entering Canada, a smooth CRA registration process starts with good planning and accurate information.
If you’re unsure about which tax accounts you need or how to register, don’t hesitate to consult with a business advisor or accountant. A little guidance now can save a lot of trouble down the road.
FAQs
1. Can I register with the CRA before my business is officially incorporated?
No. You need to complete your provincial or federal business registration before applying for a CRA Business Number and tax accounts.
2. What happens if I don’t register for GST/HST when I cross the threshold?
If you fail to register when required, you may owe back taxes and interest. The CRA can retroactively require you to remit GST/HST collected from the date you were supposed to register.
3. Can foreign businesses register for a CRA Business Number?
Yes, foreign businesses with a presence or activity in Canada can register for a Business Number. However, you may need a Canadian representative or service provider to assist with compliance and tax filings.
