In Canada, sales tax operates on both federal and provincial levels. The Goods and Services Tax (GST) is a federal value-added tax that applies across all provinces and territories. Five provinces—New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island—harmonize their sales tax with the GST, resulting in the Harmonized Sales Tax (HST), which is administered by the Canada Revenue Agency (CRA).

In Quebec, the Quebec Sales Tax (QST) applies, which has similar rules to the GST/HST. Each province may have specific regulations governing how sales tax is applied.

Sales tax generally applies to most goods and services sold in Canada. For physical goods, the purchaser's shipping address determines the applicable tax rate, while for services, the location where the service is rendered is considered. If the goods or services do not involve shipping, the purchaser's billing address is used to ascertain tax obligations.

GST is a federal tax imposed on the sale of goods and services at a rate of 5%. Depending on your business location, you may either charge GST separately or include it as part of the HST in participating provinces.

Provincial Sales Tax (PST), also referred to as Retail Sales Tax (RST) in Manitoba and QST in Quebec, is imposed by individual provinces. Rates for PST vary by province, and not all provinces have a PST.

Item descriptionThe Harmonized Sales Tax (HST) combines the federal GST and provincial sales tax into a single tax collected in certain provinces. If your business operates in an HST province, you will charge HST instead of separating GST and PST.

No, the rates of GST and HST can differ based on the specific goods or services being sold. It's essential to understand the applicable rate for your offerings to ensure compliance.

If your sales exceed $30,000, you are required to file HST returns, which can be done either annually or quarterly based on your specific situation. We offer two sessions to assist you with this process when needed.

Your filing frequency for GST/HST returns depends on your annual taxable supplies:

• Monthly: If your taxable supplies exceed $6 million.

• Quarterly: If your taxable supplies are between $1.5 million and $6 million.

• Annually: If your taxable supplies are under $1.5 million.

The tax rates you charge depend on the province where your customers are located, not your business's location. For instance, if your business is in British Columbia but you sell to customers in Ontario, you must charge the Ontario sales tax rate.