A large GST/HST remittance can create a significant cash-flow event. Canadian businesses may have several ways to manage an upcoming or outstanding GST/HST obligation, including direct payment, CRA payment arrangements, existing business credit and third-party financing.
GST/HST is generally collected by registered businesses on taxable sales and later remitted to the government, after accounting for eligible input tax credits.
In an ideal situation, the cash collected for GST/HST remains available when the remittance becomes due. In practice, business cash flow does not always move that neatly.
Customer payment delays, seasonal revenue, unexpected repairs, payroll, inventory purchases or growth expenses can all affect the amount of cash available at a particular point in time.
As a result, a profitable business can still face a temporary liquidity challenge when a significant GST/HST payment comes due.
Businesses should address the obligation promptly and understand the available options rather than allowing an unpaid balance to remain unresolved.
The best approach depends on your available cash, the amount due, financing costs and the overall financial position of your business.
If your business expects difficulty making a GST/HST payment, dealing with the issue early is generally better than waiting until the balance becomes more difficult to manage.
CRA may charge interest on unpaid balances and may take collection action when amounts remain outstanding. The exact consequences depend on the circumstances and the type of obligation.
Businesses should confirm their balance, filing status and available payment options directly with CRA or their accountant or tax advisor.
A business that cannot immediately pay the entire amount should not assume that it should avoid filing its required GST/HST return. Filing obligations and payment obligations are separate matters, and businesses should obtain professional guidance about their specific situation.
There is no universal answer. It depends on what paying the obligation would leave available for the rest of the business.
If the business can comfortably pay the GST/HST amount while maintaining enough liquidity for normal operations, paying in full may be the simplest and least expensive option.
The decision can become more difficult when the payment would consume cash needed for payroll, materials, inventory, rent, equipment repairs, project costs or other near-term operating expenses.
In those situations, a business may compare the cost of financing with the value of maintaining liquidity. Financing introduces its own cost, so that trade-off should be considered carefully.
Businesses generally collect GST/HST on behalf of the government and have an obligation to remit amounts due after applicable adjustments. Financing does not remove that tax obligation; it may simply provide an alternative source of liquidity for an eligible business facing a significant payment.
Taxio helps eligible Canadian businesses explore financing for certain business tax obligations, including eligible GST/HST amounts.
Tell us about your business, the approximate amount and when it is due. The initial Taxio eligibility request only takes a few minutes.
Check your eligibilityCommon questions Canadian businesses may have when facing a large GST/HST remittance.
CRA may allow certain taxpayers to establish a payment arrangement when they cannot pay an outstanding amount in full. Businesses should contact CRA directly to understand whether an arrangement is available and what requirements apply.
Interest may apply to outstanding GST/HST balances. Businesses should confirm current interest rates and rules directly with CRA because government rates and policies can change.
Businesses may use available credit or, depending on eligibility, third-party business financing to address certain tax obligations. Financing approval and terms vary by provider and applicant.
Eligible GST/HST obligations may qualify for Taxio financing. Availability is subject to business eligibility, underwriting, documentation and final approval.
No. Taxio is independent from the Canada Revenue Agency and is not affiliated with, endorsed by or acting on behalf of CRA or any government department.
Depending on the financing available and final approval, repayment periods may include 6, 9, 12 or 18 months.
See whether your Canadian business may qualify for a flexible Taxio financing option for an eligible business tax obligation.
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