Canadian taxes reference
Canada has a 5% goods and services tax (GST) that applies to most sales. Some provinces either charge an additional provincial sales tax (PST), or use a harmonized sales tax (HST) that includes the GST.
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Federal sales tax: GST
The Canadian government levies the GST on sales in Canada of most tangible property and of services. In HST provinces, the HST includes the GST and a provincial portion of tax. This tax is charged as one tax, and isn't broken into federal and provincial portions.
Some items are zero rated, which means that the tax isn't charged to the customer, but the GST registrant (the seller) can claim input tax credits. For these items, GST of 0% is charged.
Some items and services are exempt. For sales of these items, tax isn't charged to the customer, and the merchant can't claim input tax credits.
The difference seems slight, but the amounts must be invoiced correctly. For zero rated items, GST (or HST) of 0% must be assessed. For exempt products, no tax line is shown.
If your store is based in Canada, then generally you need to register for a GST/HST account if both of the following are true:
- You sell or lease taxable products or services.
- Your revenue from taxable sales in Canada is more than 30,000 CAD over the past four completed consecutive calendar quarters, or more than 30,000 CAD over the current calendar quarter.
If your store is not based in Canada, then generally you need to register for a GST/HST account if both of the following are true:
- You sell taxable products or services to customers in Canada, and fulfill those orders from a warehouse located in Canada.
- Your revenue from taxable sales in Canada is more than 30,000 CAD over the past twelve months.
If either of the preceding cases apply to you, then you might need to collect taxes on your sales, remit those taxes to the appropriate tax authority, and file regular reports with the tax authority. If your sales are lower than the threshold, then you don't need to register for a GST/HST account, and you don't need to collect or remit taxes.
In HST provinces, the HST supersedes the collection of GST. If you're registered to collect GST, then you are registered to collect HST too.
In practice, this means that if you're registered for GST, then you need to charge the full HST in HST provinces. HST also applies to shipping charges on orders that you ship within Canada.
GST and HST rates by province
- 5% in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon (GST only)
- 13% in Ontario (HST)
- 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island (HST)
Provincial sales tax: PST, RST, and QST
Some provinces charge their own PST rate in addition to the GST:
- British Columbia - 7% provincial sales tax (PST)
- Manitoba - 7% retail sales tax (RST)
- Quebec - 9.975% Quebec sales tax (QST)
- Saskatchewan - 6% provincial sales tax (PST)
In these provinces, two tax lines need to be shown on an invoice: one for GST and one for the provincial amount. The provincial amount is remitted separately to the individual province, which can have its own registration guidelines.
In British Columbia, 7% PST applies to retail sales and services.
Generally, if you're located in British Columbia, then you need to register for PST if you sell goods or services in British Columbia.
If you're in Canada but outside of British Columbia, then you need to register for PST if you regularly do all of the following:
- Sell taxable goods to customers in British Columbia.
- Accept purchase orders from customers located in British Columbia.
- Deliver taxable goods to a location in British Columbia (shipped physically or electronically, even if through a third party, such as a courier).
- Solicit anyone in British Columbia (through advertising or other means) for orders to purchase taxable goods. If your website doesn't target British Columbia, then you are not soliciting sales in British Columbia. However, if you have a website and you also solicit sales in British Columbia by other means, then you are soliciting sales in British Columbia.
If you store your products in British Columbia, then you need to register for, collect, and remit PST.
Delivery and shipping charges in British Columbia are generally taxable if the goods are also taxable. The taxable portion is calculated on the quantity of taxable goods as a portion of the total sale. For example, if an order has a mix of taxable and non-taxable goods, then the amount of the shipping that applies to the taxable goods is taxed.
If you sell to residents of Manitoba, then you need to register for and collect retail sales tax if all of the following apply:
- You solicit sales in Manitoba.
- You accept orders that originate in Manitoba.
- The taxable goods are for consumption or use in Manitoba.
- The taxable goods are delivered to Manitoba.
For delivery charges, if you are registered to collect RST in Manitoba, but are located out of Manitoba, then you need to charge RST on the shipping. RST isn't charged on shipping within Manitoba.
Generally, if you sell in Quebec as part of a business, then you need to register for QST.
Small suppliers and individuals who are not residents of Quebec are excluded unless you solicit goods to be delivered to Quebec consumers.
Delivery charges are taxed for sales that originate in and are shipped to Quebec.
If you sell in Saskatchewan, then you need to register to collect PST.
Shipping charges are subject to PST if delivery originates outside Saskatchewan. Within Saskatchewan, shipping charges are not taxable if the charges are shown separately.
Northwest Territories, Nunavut, and Yukon
If you sell in the Northwest Territories, Nunavut, and the Yukon, then you collect GST only. There are no provincial sales taxes for these regions.
Registering with Canadian tax agencies
If you determine that you need to charge sales tax in one or more Canadian regions, then you need to contact each of the relevant agencies and register with them. The process varies depending on where your business is based and where you sell, and on the individual government requirements.
Before you start selling, register with each agency in the tax regions where you will be selling:
Federally - Register with the Canada Revenue Agency at https://www.canada.ca/en/services/taxes/gsthst.html.
British Columbia - https://www2.gov.bc.ca/gov/content/taxes/sales-taxes/pst/register
Manitoba - https://taxcess.gov.mb.ca/
Quebec - https://www.revenuquebec.ca/en/businesses/consumption-taxes/gsthst-and-qst/registering-for-the-gst-and-qst/
Saskatchewan - https://www.saskatchewan.ca/business/taxes-licensing-and-reporting/provincial-taxes-policies-and-bulletins/provincial-sales-tax/apply-for-a-pst-number
You don't need to register with all of these agencies, only those that apply to you.