New Business Tax Checklist for Canada

Starting a new business in Canada is exciting, but the tax and regulatory requirements can feel overwhelming. This comprehensive checklist walks you through everything you need to set up your business properly with the CRA and provincial authorities — so you can focus on growing your business instead of worrying about compliance.

Step 1: Choose Your Business Structure

Your business structure affects your tax obligations, liability, and filing requirements. The most common structures in Canada are:

Sole Proprietorship: The simplest structure — you and the business are the same legal entity. Business income is reported on your personal T1 return. No separate corporate tax filing required.
Partnership: Two or more people share ownership. A T5013 partnership return must be filed, and each partner reports their share of income on their personal return.
Corporation: A separate legal entity from its owners. Requires a T2 corporate tax return. Offers liability protection and tax planning opportunities but involves more administrative complexity and cost.

Consult with a CPA before choosing your structure — the right choice depends on your income level, liability concerns, and long-term business plans.

Step 2: Register for a CRA Business Number

Every business in Canada needs a Business Number (BN) from the Canada Revenue Agency. Your BN is a unique nine-digit number that identifies your business to the federal government. You can register online through CRA's Business Registration Online service, by phone, or by mail using Form RC1.

Your BN can have multiple program accounts attached to it:

RT — GST/HST: Required if you collect GST/HST
RP — Payroll: Required if you have employees
RC — Corporate Income Tax: Required for incorporated businesses
RZ — Import/Export: Required if you import or export goods

Step 3: Register for GST/HST

You must register for a GST/HST account if your total taxable revenues exceed $30,000 in any single calendar quarter or over four consecutive calendar quarters. Even if you are below this threshold, you may choose to register voluntarily — which allows you to claim input tax credits (ITCs) on your business purchases.

In Saskatchewan, you also need to register for Provincial Sales Tax (PST) separately through the Saskatchewan Ministry of Finance if you sell taxable goods or services. Saskatchewan does not use the HST system.

Step 4: Register for Provincial Sales Tax (PST)

Saskatchewan businesses that sell or lease taxable goods, provide taxable services, or bring taxable goods into the province for their own use must register for a PST vendor's licence. Registration is done through the Saskatchewan eTax Services portal. There is no minimum revenue threshold for PST — if you sell taxable goods or services, you must register.

Step 5: Set Up Payroll (If You Have Employees)

If you plan to hire employees, you need to:

Register for a CRA payroll account (RP program account)
Obtain a Workers' Compensation Board (WCB) account in Saskatchewan
Calculate and withhold Canada Pension Plan (CPP), Employment Insurance (EI), and income tax from employee paycheques
Remit source deductions to CRA by the required due date (typically the 15th of the following month)
Prepare T4 slips and summaries by the last day of February each year

Step 6: Choose Your Fiscal Year-End

Sole proprietors and partnerships: Your fiscal year-end must be December 31 (with limited exceptions for certain partnerships).

Corporations: You can choose any fiscal year-end date. Common choices include December 31, March 31, June 30, or a date that aligns with your business cycle. For seasonal businesses, choosing a year-end during your slow season can make tax preparation easier and less expensive.

Step 7: Set Up Proper Record-Keeping

CRA requires you to keep business records for at least six years from the end of the last tax year to which they relate. Your records must support the income, deductions, and credits you report. At minimum, you should maintain:

All sales invoices and receipts
All purchase invoices and receipts
Bank statements and cancelled cheques
General ledger and journal entries
Payroll records (if applicable)
Vehicle logs (if claiming vehicle expenses)
Home office records (if applicable)
Capital asset records and CCA schedules

Using cloud accounting software like QuickBooks Online or Xero from the start makes record-keeping significantly easier and helps ensure you capture all deductions.

Step 8: Know Your Key Tax Deadlines

Personal tax return (sole proprietors): June 15 for filing (but any balance owing is due April 30)
Corporate tax return: Six months after your fiscal year-end
Corporate tax payment: Two or three months after your fiscal year-end (depending on eligibility for the small business deduction)
GST/HST returns: Quarterly or annually depending on your reporting period (annual filers: three months after fiscal year-end)
PST returns: Monthly, quarterly, or semi-annually depending on revenue
Payroll remittances: Typically the 15th of the month following the pay period
T4 slips: Last day of February
T5013 (partnerships): March 31

Step 9: Understand Common Deductions

New business owners often miss legitimate deductions. Make sure you are tracking expenses in these categories:

Office supplies and equipment
Business insurance
Professional fees (accounting, legal)
Advertising and marketing
Vehicle expenses (business portion)
Home office expenses (if applicable)
Meals and entertainment (50% deductible)
Travel expenses
Software subscriptions
Telephone and internet (business portion)

Step 10: Work with a CPA from Day One

The most cost-effective time to engage a CPA is when you are starting your business — not after you have been operating for a year and need to untangle a year's worth of records. A CPA can help you choose the right business structure, set up your accounting system, register for the proper tax accounts, and establish good habits from the beginning.

Get Started on the Right Foot

At DLA CPA, we specialize in helping new Canadian businesses navigate the setup process. From CRA registration to choosing accounting software to ongoing bookkeeping and tax services, we provide the support you need to build a solid financial foundation.