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Out of province sales: where do you pay sales tax?

When you do out-of-province business, it can be challenging to know which sales tax to apply. Do you charge what your province does or the tax of where the customer lives?

GST, HST or PST?

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. If a customer asks you to deliver products to a different province or territory, you charge the taxes of the jurisdiction where the product ends up.

No matter which taxes you pay, all sales taxes are remitted to the Canada Revenue Agency except in Québec, where they are collected by Revenu Québec.

How much do you pay?
   
   

Collects GST (federal goods and services tax) only:

Alberta, Northwest Territories, Nunavut, Yukon: 5%

Collects HST (harmonized sales tax) only:

Newfoundland &Labrador, Prince Edward Island, Nova Scotia, New Brunswick, Ontario: 15%

Collects both GST + PST:

British Columbia – 5% + 7% = 12%
Manitoba – 5% + 8% = 13%
Saskatchewan – 5% + 6% = 11% *Quebec – 5% + 9.975% = 14.975% (QST)

 

Please note: Vehicles are considered separately. Different provincial taxes might apply than those shown above depending on a number of factors. Revenue Canada gives guidance on required GST/HST.

Of course, this is only a simplified version of the Place of Supply rules and you may need clarification for your individual situation. The GST/HST rulings and interpretations department is a free service that is available to give you a ruling on how the legislation applies to your scenario.

The Canadian Business Network also has a guide Overview of Charging and Collecting Sales tax that you may find useful, especially when you need to apply GST and PST together.