A. HST Provinces—New Brunswick, Newfoundland & Labrador, Ontario and Nova Scotia
In the provinces of Ontario, Nova Scotia, New Brunswick and Newfoundland & Labrador, the administration of GST and PST has been combined and the result referred to as Harmonized Sales Tax (“HST”). The allocation of provincial sales tax among these provinces are governed by “place of supply rules” contained in the federal legislation.
According to the place of supply rules, the province with jurisdiction is generally the one in which the supply occurs. For example:
- if the goods supplied are tangible personal property then the relevant province is generally the one in which the goods are delivered or made available to the recipient;
- if the supply is of real estate then the relevant province is generally the one in which that real estate is located;
- if the supply is of intangible personal property, jurisdiction will depend on a number of factors, including the place in which the property can be used and the location of the purchaser;
- different intangible properties are subject to different rules; and
- when services are supplied, the relevant province is generally determined according to the home or business address of the purchaser, although specific rules apply for certain types of services.
The place of supply rules are extensive and the above examples are general and for illustrative purposes only.
When property and services are brought into an HST province from another province (whether or not such other province is also an HST province) or from outside Canada for consumption, use or supply in that HST province, the supplier is required to self-assess since no actual purchase and sale occurs.
B. Non-HST provinces—Alberta, British Columbia, Manitoba, Prince Edward Island, Quebec and Saskatchewan
1. Alberta (no sales tax)
Alberta is the only province that does not have its own sales tax, relying instead on its oil revenues.
2. British Columbia
British Columbia’s sales tax applies to all goods and certain services sold at a retail sale in British Columbia. This generally applies to all consumer purchases, as distinguished from purchases for the purpose of resale.
Goods includes all tangible personal property and extends also to computer software and various fixtures.
The following services are generally taxable:
- legal;
- lodging;
- services to goods such as vehicle maintenance, furniture assembly and computer repair;
- telecommunications, including internet services and certain digital and electronic media content such as music and movies; and
- various services connected with tangible personal property.
Consulting, management and financial services are not taxable.
In determining whether a sale occurs in British Columbia, it is the place of delivery, not the residence of the purchaser, that governs. Goods and services delivered by a vendor, or by a common carrier on behalf of a vendor, to the purchaser’s premises outside the province are not, therefore, subject to British Columbia’s sales tax. If, however, the goods are subsequently brought into British Columbia for consumption or use in that province then such person must voluntarily self-assess and pay British Columbia’s sales tax at that time.
If the goods or services are exempt by reason of being delivered by the vendor or shipped by common courier outside the province, the vendor must retain the carrier’s bill of lading or the equivalent in order to substantiate the extra-provincial delivery.
3. Manitoba
Manitoba’s sales tax applies to all goods and certain services sold at a retail sale in Manitoba. This generally applies to all consumer purchases, as distinguished from purchases for the purpose of resale.
Goods includes all tangible personal property and extends also to computer software and various fixtures.
The following services are generally taxable:
- Lodging;
- Telecommunications;
- Various services connected with tangible personal property;
- Printing, binding and similar services;
- Film production;
- Sound recording;
- Legal;
- Accounting;
- Architectural;
- Engineering;
- Security;
- Private investigation; and
- Tanning.
In determining whether a sale occurs in Manitoba, it is the place of delivery, not the residence of the purchaser, that governs. Goods and services delivered by a vendor, or by a common carrier on behalf of a vendor, to the purchaser’s premises outside the province are not, therefore, subject to Manitoba’s sales tax. If, however, the goods are subsequently brought into Manitoba for consumption or use in that province then such person must voluntarily self-assess and pay Manitoba’s sales tax at that time.
If the goods or services are exempt by reason of being delivered by the vendor or shipped by common courier outside the province, the vendor must support the exemption as follows:
- If the goods are delivered by the vendor or its employee, the vendor and purchaser must sign a statement acknowledging that delivery was out of province; or
- If the goods are delivered by common carrier, the vendor must retain the carrier’s bill of lading or the equivalent in order to substantiate the extra-provincial delivery. It should be noted, however, that this exemption only applies if the vendor engages the carrier. If the purchaser engages the carrier then the good are considered to have been picked up in Manitoba on the purchaser’s behalf.
4. Prince Edward Island
Prince Edward Island (“PEI”) applies its sales tax to all goods and certain services sold at a retail sale in PEI. This generally applies to all consumer purchases, as distinguished from purchases for the purpose of resale.
Goods includes all chattels, i.e., personal property as distinguished from real estate, and also extends to computer software and related services.
The following services are generally taxable:
- Admissions;
- Telecommunications;
- Laundry and dry cleaning;
- Repair and installation labour;
- Accommodations;
- Golf;
- Legal;
- Accounting;
- Consulting;
- Engineering; and
- Architectural.
In determining whether a sale occurs in PEI, it is the place of delivery, not the residence of the purchaser, that governs. Goods and services delivered by the vendor, or by a common carrier on behalf of the vendor, to the purchaser’s premises out of province are not, therefore, subject to PEI’s sales tax. If the goods are, however, subsequently brought into PEI for consumption or use in that province then such person must voluntarily self-assess and pay PEI sales tax at that time.
If the goods or services are exempt by reason of being delivered by the vendor or shipped by common courier outside the province, the vendor must keep a record of such deliveries, including the name, the proper mailing address and the telephone number of the purchaser.
5. Quebec
A non-resident of Quebec that is not already a QST registrant is required become a QST registrant and to collect and remit QST on a supply made in Quebec of a movable property or service only if that supply is made in the course of carrying on business in Quebec. The factors generally considered to determine whether business is being carried on in a given jurisdiction include (but are not limited to) the following:
- the place where agents or employees of the non-resident are located;
- the place of delivery;
- the place where purchases are made or assets are acquired;
- the place from which transactions are solicited;
- the location of assets or an inventory of goods;
- the place where the business contracts are made;
- the location of a bank account;
- the place where the non-resident’s name and business are listed in a directory;
- the location of a branch or office;
- the place where the service is performed; and
- the place of manufacture or production.
In addition to the foregoing considerations, a special rule requires a non-resident of Quebec that is not already a QST registrant to become a QST registrant and to collect and remit QST on a supply made in Quebec of a movable property or a service if that supply is of an admission in respect of an activity, a seminar, an event of a place of amusem*nt unless the non-resident supplier acquired the admission from another person.
Place of supply rules
If it is determined that the supply is made in the course of carrying on business in Quebec, the place of supply rules apply to determine whether Quebec nevertheless concedes jurisdiction to another province. The place of supply rules apply equally to QST registrants and residents of Quebec.
According to the place of supply rules, the province with jurisdiction is generally the one in which the supply occurs. For example:
- if the goods supplied are tangible personal property (referred to in Quebec as “corporeal movable property”) then the relevant province is generally the one in which the goods are delivered or made available to the recipient;
- if the supply is of real estate then the relevant province is generally the one in which that real estate is located; and
- if the supply is of intangible personal property, jurisdiction will depend on a number of factors, including the place in which the property can be used and the address of the purchaser as provided to the supplier.
When services are supplied, the relevant province is generally determined according to the home or business address of the purchaser, although specific rules apply for certain types of services. Services related to real estate, for example, are deemed to be made in Quebec if that real estate is located in Quebec.
The place of supply rules are extensive and the above examples are general and for illustrative purposes only.
When property and services are brought into an HST province from another province (whether or not such other province is also an HST province) or from outside Canada for consumption, use or supply in that HST province, the supplier is required to self-assess since no actual purchase and sale occurs.
6. Saskatchewan
Saskatchewan’s sales tax applies to all goods and certain services sold at a retail sale in Saskatchewan. This generally applies to all consumer purchases, as distinguished from purchases for the purpose of resale.
Goods includes all tangible personal property and extends also to electricity and to gas used in the operation of internal combustion engines and turbines.
The following services are generally taxable:
- Computer services;
- Credit reporting and collection;
- Dry cleaning and laundry;
- Lodging;
- Real estate services;
- Repair or installation;
- Security or private investigation;
- Telecommunications;
- Telephone answering services;
- Veterinary services;
- Accounting;
- Advertising;
- Architectural;
- Commercial building cleaning;
- Employment placement;
- Engineering; and
- Legal.
In determining whether a sale occurs in Saskatchewan, it is the place of delivery, not the residence of the purchaser, that governs. Goods and services delivered by the vendor, or by a common carrier on behalf of the vendor, to the purchaser’s premises out of province are not, therefore, subject to Saskatchewan’s sales tax. If the goods are, however, subsequently brought into Saskatchewan for consumption or use in that province then such person must voluntarily self-assess and pay Saskatchewan’s sales tax at that time.
If the goods or services are exempt by reason of being delivered by the vendor or shipped by common courier outside the province, the vendor must keep a record of such deliveries, such was by a vehicle log or waybills.
FAQs
In general, GST and HST is charged in the province where the goods are delivered.
Who is exempt from sales tax in Canada? ›
Zero-rated supplies
basic groceries such as milk, bread, and vegetables. agricultural products such as grain, raw wool, and dried tobacco leaves. most farm livestock. most fishery products such as fish for human consumption.
Do I need to collect sales tax for selling online Canada? ›
Selling online between provinces. A GST/HST-registered online retailer who has a physical presence in one province and sells taxable goods to consumers in other provinces is required to charge the GST/HST at a rate based on where the goods are delivered.
Do I charge sales tax when selling to Canada? ›
You are obligated to charge your Canadian customers GST/HST sales tax when all of these are true: You carry on business in Canada. You sell taxable supplies. You are not a small business supplier.
How do I know if I need to charge HST? ›
You have to start charging GST/HST on the supply that made you exceed $30,000. You exceed the $30,000 threshold 1 over the previous four (or fewer) consecutive calendar quarters (but not in a single calendar quarter).
Who is exempt from charging HST? ›
Exempt goods include medical equipment, groceries and exports. If you give lessons, such as how to play the piano or guitar, or you provide childcare, you're exempt from collecting and remitting GST/HST. The CRA deems any business with $30,000 or less in revenue to be a small supplier.
Who is subject to taxation in Canada? ›
Types of Income
All business, property, and employment income, whether active or passive, falls within the scope of Canadian taxation. Fifty per cent of capital gains are included in income, and, accordingly, only 50% of capital losses may be offset. Capital losses can only be offset against capital gains.
Who is exempt for taxes? ›
Being tax-exempt means that some or all of a transaction, entity or person's income or business is free from federal, state or local tax. Tax-exempt organizations are typically charities or religious organizations recognized by the IRS.
What is exempt from GST and PST? ›
Books, newspapers and magazines. Children-sized clothing. Bicycles. Prescription medications and household medical aids such as cough syrup and pain medications.
Do I have to pay taxes on selling personal items? ›
Whether you sell items only online or not, the IRS and most states see any income you earn from these sales as taxable. Whether or not you will owe taxes for selling personal items, goods, or services online will depend on several factors, including whether you made a profit.
You only have to pay tax if the items you sell have increased in value during the time you have owned them.
How much can I sell online without paying tax? ›
You must file a return if you earn $400 or more in net earnings from your business.
Do I have to charge tax on my online store Canada? ›
Do I have to charge sales tax? If your business earns more than $30,000 a year (regardless of whether it's a profit), you must charge your Canadian customers sales tax as per the rate of the province you are shipping it to (see chart below).
How is sales tax determined in Canada? ›
The rate of tax to charge depends on the place of supply. This is where you make your sale, lease, or other supply. A zero-rated supply ','" è' 'has a 0% GST/HST rate throughout all of Canada. For example, basic groceries are taxable at the rate of zero (0% GST/HST) in every province and territory.
What type of sales taxes are applicable in Canada? ›
There are three types of sales taxes in Canada: PST, GST and HST.
How much can a small business make before paying taxes in Canada? ›
For 2021, it is $13,808. Keep in mind: you are still required to file taxes if you make $13,808 or less.
What happens if you charge GST and are not registered? ›
If a business is not registered for GST, they cannot add 10% onto the price of their goods/services and claim it as “GST”. Likewise, you cannot claim a GST credit on the purchase as the seller was not registered, even if you have an invoice from them showing an amount as GST.
When should you not charge PST? ›
You don't charge your customers GST/PST/HST for goods and services that are zero-rated such as: ê Basic groceries from a grocery store (meat, fish, dairy, vegetables, etc.)
What properties are subject to HST? ›
HST is applicable on the purchase of property in four instances: (a) where the property is residential property and is a new construction build or has been substantially renovated; (b) where the property is a residential property but contains a portion of non personal use vacant land; (c) where the property is a ...
What is subject to HST? ›
If your business has a higher revenue than $30 000 in a single calendar quarter or four consecutive quarters, you must register for an HST number in Canada. You must begin charging and remitting tax immediately.
You are generally eligible for the GST/HST credit if you are considered a Canadian resident for income tax purposes the month before and at the beginning of the month in which the Canada Revenue Agency makes a payment. You also need to meet one of the following criteria: you are at least 19 years old.
What income is subject tax? ›
The term taxable income refers to any gross income earned that is used to calculate the amount of tax you owe. Put simply, it is your adjusted gross income less any deductions. This includes any wages, tips, salaries, and bonuses from employers. Investment and unearned income are also included.
What is subject to tax rule? ›
Subject to tax rule
It allows for source country taxation where a payment is undertaxed in the country of the recipient. The rule will apply to individual payments between connected persons, with a definition based on existing tests of common control.
What does subject to taxation mean? ›
Generally, an amount included in your income is taxable unless it is specifically exempted by law. Income that is taxable must be reported on your return and is subject to tax.
Do you have to pay income tax after age 70? ›
If you are at least 65, unmarried, and receive $14,700 or more in non-exempt income in addition to your Social Security benefits, you typically must file a federal income tax return (tax year 2022).
How do I know if I am exempt from 2022 withholding? ›
You can claim exemption from withholding only if both the following situations apply: For the prior year, you had a right to a refund of all federal income tax withheld because you had no tax liability. For the current year, you expect a refund of all federal income tax withheld because you expect to have no liability.
How do I declare a tax exemption? ›
Tax exemptions can be availed by investing in the following tools:
- Senior Citizen Savings Scheme (SCSS)
- Sukanya Samriddhi Yojana (SSY)
- National Pension Scheme (NPS)
- Public Provident Fund (PPF)
- National Pension Scheme (NPS)
GST-free supplies include:
- Cars for disabled people.
- Certain activities of charities and gift-deductible bodies.
- Certain prepaid funerals.
- Certain supplies under contracts made before 8 July 1999.
- Certain transactions involving precision metals.
- Child Care.
- Crown Land.
- Education.
Exemption from payment of provincial sales taxes
Generally, departments claim an exemption from the payment of provincial sales taxes ( PST ) on the purchase of taxable goods and services in all provinces with a PST , except Quebec.
What sales are exempt from GST? ›
Books, maps, newspapers, journals, non-judicial stamps, postal items, live animals (except horses), beehives, human blood, sem*n, bangles, chalk sticks, contraceptives, earthen pots, props used in pooja (including idols, bindi, kumkum), kites, organic manure, and vaccines.
For tax years beginning with 2022, if you have transactions totaling $600 or more then you should receive a 1099-K form reporting this income to the IRS. For tax years prior to 2022, the threshold is more than $20,000 in gross sales and have 200 or more transactions on eBay.
Does selling personal items count as income Canada? ›
Although you have to report any gain on the sale of personal-use property, generally you are not allowed to claim a loss.
Is selling personal items considered income Canada? ›
When you sell personal-use property, such as a boat, personal computer or wardrobe, for over $1,000 more than you originally paid, you must report a capital gain on your tax return.
How much money can you make selling things before paying taxes? ›
Generally, you must pay self-employment taxes if your net profits are $400 or more.
How much do you have to sell on Facebook Marketplace to pay taxes? ›
Once your sales on Marketplace reach $499, you may have to provide your full tax information (all 9 digits of your SSN or ITIN).
Do I have to report income from selling used items? ›
The rule of thumb is that if you used the items and then sold them for less than you bought them for, then you owe no taxes on the sale. However, if you sold an antique or collectible that had appreciated since you first acquired it, you likely would be on the hook for taxes on the profit.
How much money can a small business make before paying taxes? ›
But in some situations your loss is limited. See Publication 334, Tax Guide for Small Business (For Individuals Who Use Schedule C) for more information. You have to file an income tax return if your net earnings from self-employment were $400 or more.
How much can I sell on eBay without being a business? ›
New sellers have a selling limit: up to 10 items with a total value of up to $500 per month. This means that, during the month, you can list or/and sell up to 10 items for a total of up to $500. This is the standard limit for all new eBay sellers.
What happens if I sell over 600 on eBay? ›
Starting on January 1, 2022, eBay and other marketplaces are required by the IRS to issue a Form 1099-K for all sellers whose sales exceed $600. The new tax reporting requirement will impact your 2022 sales, which you file in 2023 for tax year 2022—it will not apply to your 2021 sales and taxes that you filed in 2022.
Do I charge sales tax to international customers Canada? ›
GST With Foreign Clients
As a general rule, goods that are exported outside of Canada and services rendered to non-residents are zero-rated under the GST/HST rules. This means that they're technically taxable, but at a rate of 0%, you don't have to charge anything.
Mr Yeo Kai Eng, indirect tax leader at consultancy firm EY, said: “Bottom line is, come 2023, assuming an online marketplace is registered for GST, anything you buy through that marketplace, GST will be charged.” The tax experts said that some online shopping behaviour might change after this new rule is in force.
Does Google store charge tax Canada? ›
When you subscribe through Google Store in Canada, Mexico, or the US, your billing address determines your taxes. If you start your subscription and then move to a new home, there's no tax change within your current billing period.
Which province is the most taxed in Canada? ›
Income tax rates in Quebec are higher than in other provinces and territories because the government of Quebec finances a wide variety of services that other governments do not.
Do I have to pay Canadian sales tax? ›
Generally, if you provide taxable property and services in Canada and your total taxable revenues exceed $30,000 in any single calendar quarter or in four consecutive calendar quarters, you will have to register for the GST/HST.
Do I need to charge sales tax Canada? ›
You have to start charging GST/HST on the supply that made you exceed $30,000. You exceed the $30,000 threshold 1 over the previous four (or fewer) consecutive calendar quarters (but not in a single calendar quarter).
Do some provinces charge PST GST and HST? ›
The current rates are: 5% (GST) in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan, and Yukon. 13% (HST) in Ontario. 15% (HST) in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.
Do I have to charge PST to out of province customers? ›
There are no general exemptions that apply if you sell goods or services in B.C. to customers that live outside B.C. (e.g. tourists). However, you generally do not charge PST if you arrange for the goods to be shipped or delivered to a location outside B.C.
Is sales tax based on buyer or seller Location Canada? ›
CRA's Place of Supply rules determine which tax a business should collect. The easiest way to determine the rate of tax to charge is to look at the province or territory in which the product is supplied to the customer. If a product was bought in your business, the customer pays your jurisdiction's sales taxes.
Which province does not collect HST? ›
Every province except Alberta has implemented either a provincial sales tax or the Harmonized Sales Tax. The federal GST rate is 5 percent, effective January 1, 2008. The territories of Yukon, Northwest Territories, and Nunavut have no territorial sales taxes, so only the GST is collected.
What is the difference between GST PST and HST? ›
The Canadian sales taxes include the Provincial Sales Tax (PST), the Quebec Sales Tax (QST), the Goods and Services Tax (GST), and the Harmonized Sales Tax (HST) which is a combination of the provincial sales tax portion and the GST in some provinces.
If you don't have to charge GST, do you have to charge PST? Yes, if your business resides in a province that has a provincial sales tax, or retail sales tax (RST) as it is also called, you will have to charge, collect and remit PST unless you are selling a product or service that is PST exempt, in most cases.
What is the difference between RST and PST? ›
Provincial Sales Tax (PST)
PST is also called Retail Sales Tax (RST). In Quebec, this tax is called QST. The tax is collected at the provincial level. Each province could charge consumers differently.
Do you pay taxes in the province you live in or work in? ›
When you file your income tax return, your tax obligations are based on your residency. So even if you live in a different province than your employer or client, you have to pay taxes for the province or territory that you're living in.
How is Canadian province of residence determined? ›
Your province or territory of residence is the province or territory where you lived or of which you were considered to be a factual resident on December 31, 2021. The CRA needs this information to calculate your taxes and credits correctly. For more information, see Get a tax return.
Is sales tax based on origin or destination? ›
* California is unique. It's a modified origin state where state, county and city taxes are based on the origin, but district taxes are based on the destination (the buyer). Unfortunately, there are not many origin-based states.
Do foreigners pay HST in Canada? ›
As the non-resident vendor is generally not considered to be carrying on business in Canada, they are not required to register for GST/HST purposes and, as a result would not be required or permitted to charge GST/HST on the supply of digital goods and services to Canadian customers.
