Can I temporarily stop filing sales tax returns during the slow periods?

Not on your own initiative, but a mechanism exists. CRA guide RC4022 describes designated reporting periods: if you have little or no GST/HST to report, for example because the business is seasonal or part time, you can send a written request to your tax services office setting out the periods to be designated. Once the request is approved you no longer file for those periods, as long as you keep meeting the criteria: the tax you expect to charge plus the other amounts you must add to your net tax for the period must be $1,000 or less, you must have met all your obligations with the CRA, and you must not have revoked a designation in the current fiscal year. The relief is not available to an annual filer, or to a branch of a registrant unless the registrant as a whole applies. Until the request is approved, the return is still due, at zero.

The corporation has been dormant for years. Can I just stop filing and let it lapse?

Not by doing nothing. Guide T4012 is explicit that until the corporation has been dissolved, the CRA considers that it still exists and it will have to file a return even if there is no tax payable. So the returns keep coming due, year after year, on a company that is doing nothing, and a business number left open keeps its obligations open with it. Letting them pile up is how a dormant shell becomes a compliance file, with a demand to file and a director explaining gaps years later. If the company is genuinely finished, the answer is to wind it up properly under the statute it was incorporated under, then consult CRA form RC145 to determine whether you need to complete it and send the CRA the articles of dissolution. If you might use the company again, filing nil returns is almost always the cheaper path, because a nil return takes minutes.

No income last year. Do I still have to file?

Filing and paying are two different questions

A year with no sales, a contract that never landed, a project left on pause. The instinct is that there is nothing to report, because there is nothing to tax.

That folds two questions into one. How much tax you owe depends on what you earned. Whether a return is due depends on what you are: a corporation, a sales tax registrant, an individual in certain defined situations. A corporation that earned nothing is still a corporation. A registrant that invoiced nothing is still a registrant.

A corporation files for every tax year

Paragraph 150(1)(a) of the Income Tax Act requires a return to be filed, without notice or demand, for each taxation year of a corporation that was resident in Canada at any time in the year, within six months after the end of the year. The provision is keyed to the taxation year, not to the income.

CRA guide T4012 states it without hedging: all corporations, including non-profit organizations, tax-exempt corporations and inactive corporations, have to file a T2 return for every tax year, even if there is no tax payable. The only exceptions to that rule are tax-exempt Crown corporations, Hutterite colonies, and corporations that were registered charities throughout the year.

The same guide closes the door most people are hoping for. Until the corporation has been dissolved, the CRA considers that it still exists, and it will have to file a return even if there is no tax payable. Stopping operations is not the same as ceasing to exist.

A registrant files for every reporting period

On the sales tax side the rule is even more mechanical. Subsection 238(1) of the Excise Tax Act: every registrant shall file a return with the Minister for each reporting period of the registrant. No income condition appears anywhere in it.

Guide RC4022 puts it in working language under its heading on nil returns. File a return for every reporting period, even if you have no net tax to remit and are not expecting a refund. Even with no business transactions in a reporting period, the return is still due. Skip it and you may see delays in getting refunds, a failure to file notice, and a failure-to-file penalty.

That is the part that surprises people who closed the shop for a season. Registration, not activity, is what creates the obligation, and it lasts as long as the registration does.

A loss year is the one worth filing

A year with no revenue is rarely a year with no costs. Rent, insurance, licences, interest, depreciation: the loss is real and it has value.

Paragraph 111(1)(a) allows a deduction for non-capital losses of the 20 taxation years immediately preceding the year and the 3 taxation years immediately following it. Today's loss can wipe out the profit of a year that has already been taxed, or wait two decades for the good years to come back. A loss that was never reported, though, is not on the record anywhere.

Keeping the quiet years current

The calm year is the one where the return costs the least to prepare and protects the most. There is little to reconstruct, the bank activity is thin, and the work takes an afternoon rather than a rescue.

It is also the year that quietly becomes expensive if it is skipped, because nothing announces the problem. No assessment arrives, no penalty computes on a nil balance, and the file looks fine right up until a demand to file, a stalled refund, or a loss carryforward nobody can substantiate. We keep the returns current through the slow years so the record never has a hole in it.