• GST74 - Election and revocation of an election to use the quick method of accounting

General Information

Who can make this election?

You can use the quick method if you meet all of the following conditions:

• You have been in business continuously throughout the year (365 days) ending immediately before your current reporting period (if you are a new registrant see New registrants)

• You did not revoke an election for the quick method or the simplified method for claiming ITCs during that 365-day period

• You are not a person listed under Exceptions, below

• Your revenues from annual worldwide taxable supplies and those of your associates, including the GST/HST and zero-rated supplies, are not more than $400,000 for either the period consisting of the first four consecutive fiscal quarters out of your last five fiscal quarters, or the period consisting of the last four fiscal quarters out of your last five fiscal quarters. When you calculate your annual worldwide taxable supplies, exclude revenues from supplies of financial services and sales of real property, capital assets, goodwill from the sale of a business, and, before January 1, 2017, eligible capital property.

When can you make the election?

If you file annual GST/HST returns, you have to make the election by the first day of your second fiscal quarter.

If you file monthly or quarterly GST/HST returns, you have to make your election by the due date of the return in which you begin using the quick method.

You can start using the quick method on the effective date you indicate to us. However, this date has to be the first day of a GST/HST reporting period.

If you previously elected to use the quick method and had revoked that election, you have to wait at least one year from the date the revocation became effective before you can elect to use the quick method again.

How do you elect to use the quick method?

You can elect to use the quick method by using our online services in:

• My Business Account, if you are a business owner; or

• Represent a Client, if you are an authorized representative or employee.

You can also elect to use the quick method by completing and sending a Form GST74, Election and Revocation of an Election to Use the Quick Method of Accounting, to your Tax services offices (TSO).

How long does the election stay in effect?

Generally, the election stays in effect as long as the total annual revenue from your worldwide taxable supplies (including the GST/HST and zero-rated supplies), and those of your associates, does not exceed $400,000, or until you become a person that cannot use the quick method because of the type of business you carry on, see Exceptions.

Do not include revenues from supplies of financial services and sales of real property, capital assets, goodwill from the sale of a business, and, before January 1, 2017, eligible capital property.

If your election ceases to be in effect, you have to start accounting for the GST/HST using the regular method:

• at the beginning of your next fiscal year if:

  • you file annual returns; and

  • in your current fiscal year, you exceed the $400,000 threshold or become a person that cannot use the quick method because of the type of business you carry on.

• at the beginning of your second fiscal quarter of a fiscal year if:

  • you file monthly or quarterly returns;

  • your election to use the quick method was in effect at the beginning of that year; and

  • you exceeded the $400,000 threshold in your previous fiscal year.

• at the beginning of your next fiscal quarter if:

  • you file monthly or quarterly returns;

  • your election to use the quick method was not in effect at the beginning of the fiscal year; and

  • you exceeded the $400,000 threshold in both the first four and the last four consecutive quarters of the previous five fiscal quarters.

• at the beginning of a fiscal quarter if:

  • you file monthly or quarterly returns; and

  • you become a person that cannot use the quick method because of the type of business you began to carry on in the fiscal quarter.

Note

When and how can you revoke the election?

You can revoke the election only after your quick method election has been in effect for at least one year.

You can revoke the election by using our online services in:

• My Business Account, if you are a business owner; or

• Represent a Client, if you are an authorized representative or employee.

You can also revoke the election by sending a Form GST74, Election and Revocation of an Election to Use the Quick Method of Accounting, to your TSO.

You have to revoke the election by the due date of the GST/HST return for the last reporting period in which you wish to use the quick method.

If you revoke the election, you have to wait at least one year before you can elect to use the quick method again.

In addition, if you stop using the quick method, you cannot claim ITCs for any tax paid or payable on purchases you made while using it, other than the ITCs you would have been entitled to claim, but did not claim, while you were using the quick method.

Books and records

When you complete your GST/HST return using the quick method, you do not have to indicate the actual GST/HST that you charged on most of your taxable supplies or the GST/HST paid or payable on most of your business purchases. However, you still have to keep detailed records of this information. Keep all books and records related to your business purchases and your supplies for six years after the year they relate to. These have to be made available to our auditors on request.

What if you need help?

For more information, see Guide RC4058, Quick Method of Accounting for GST/HST, go to canada.ca/gst-hst or call 1-800-959-5525.

Forms and publications

To get our forms and publications, go to canada.ca/gst-hst-pub or call 1-800-959-5525.