The GST is a tax that applies to the supply of most property and services in Canada. The provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador, referred to as the participating provinces, harmonized their provincial sales tax with the GST to create the HST. Generally, the HST applies to the same base of property and services as the GST. In some participating provinces, there are point-of-sale rebates equivalent to the provincial part of the HST on designated items.
As of July 1, 2010, Ontario harmonized its retail sales tax with the GST to implement the HST at the rate of 13% and British Columbia harmonized its provincial sales tax with the GST to implement the HST at the rate of 12%. Also, as of July 1, 2010, Nova Scotia increased its HST rate from 13% to 15%.
For the rates of each province, see GST/HST rates.
Almost everyone has to pay the GST/HST on purchases of taxable supplies of property and services (other than zero-rated supplies). A limited number of sales or supplies are exempt from GST/HST.
Although the consumer pays the tax, businesses are generally responsible for collecting and remitting it to the government. Businesses that are required to have a GST/HST registration number are called registrants.
Registrants collect the GST/HST on most of their sales and pay the GST/HST on most purchases they make to operate their business. They can claim an input tax credit, to recover the GST/HST paid or payable on the purchases they use in their commercial activities.
GST/HST registrants must meet certain responsibilities. Generally, they must file returns on a regular basis, collect the tax on taxable supplies they make in Canada, and remit any resulting net tax owing.
Nova Scotia, New Brunswick, and Newfoundland and Labrador have combined their respective provincial sales taxes with the GST to create a harmonized sales tax (HST) in each of these provinces. The HST rate in New Brunswick, and Newfoundland and Labrador is 13%, composed of a 5% federal part (equal to the 5% GST) and an 8% provincial part.
As of July 1, 2010, Nova Scotia increased its HST rate from 13% to 15%.
Since July 1, 2010, Ontario and British Columbia (BC) combined their respective provincial sales taxes with the GST to implement an HST in each of these provinces. The HST rate for Ontario is 13% (a 5% federal part and an 8% provincial part). The HST rate for BC is 12% (a 5% federal part and a 7% provincial part).
Those provinces that have combined their respective provincial sales taxes with the GST to create the HST are known as participating provinces.
Generally, GST/HST registrants must charge and account for the GST on taxable supplies (other than zero-rated supplies) of property and services made in Canada. However, where GST/HST registrants make taxable supplies (other than zero-rated supplies) in Canada, and those supplies are made in a participating province, they must charge and account for the HST instead of the GST.
Most supplies or importations into Canada of property and services are taxable. A small number of supplies are exempt from GST/HST. It is important to know which supplies are taxable and at which rate. You also need to know which supplies are exempt from the GST/HST. However, the rules for charities are different in that most supplies made by charities are exempt. To know more, see Taxable or exempt for charities.
If you provide only exempt goods and services, you cannot register for GST/HST. This means that you do not charge GST/HST on your supplies of your goods and services, and you do not claim input tax credits.
Exempt goods and services include:
Some goods and services are taxable at 0% (zero-rated) . This means GST/HST is not charged on the supply of these goods and services.
However, a GST/HST registrant can claim an input tax credit for the GST/HST paid or owed on expenses made to provide zero-rated sales or supplies.
Goods and services taxable at 0% include:
A supply of a freight transportation service made in Canada can be taxable at 5%, 12%, 13%, or 15%, or zero-rated.
Most domestic freight transportation services are subject to the HST for destinations within the participating provinces and to the GST for destinations in the rest of Canada. If you provide a freight transportation service that takes place partly outside Canada, but both the origin and destination are in Canada, it is considered a domestic service. Examples include coastal shipping or shipments between two places in Canada routed through the United States.
Where a supply of a freight transportation service has destinations in more than one province, the provision of the service of transporting the goods destined for each province is considered to be a separate supply made for a separate amount equal to the portion of the total amount for the supply that is reasonably attributable to the transportation of the goods to that province. As a result, if a separate supply of a freight transportation service has a destination in a participating province, that supply is considered to be made in that province for an amount equal to the portion of the total amount that is reasonably attributable to that service and the HST would apply to that amount. If a separate supply of a freight transportation service has a destination in a non-participating province, that supply is considered to be made in that province for an amount equal to the portion of the total amount that is reasonably attributable to that service and the GST would apply.
International freight services
Domestic freight services
Freight transportation services provided in Canada are generally subject to the GST/HST. However, the following freight transportation services are zero-rated and you do not charge the GST/HST for providing them:
| On or after July 1, 2010 | On or after January 1, 2008, and before July 1, 2010 | Before January 1, 2008, and after June 30, 2006 | On or after April 1, 1997, and before July 1, 2006 | Before April 1, 1997 | |
| Alberta | 5% | 5% | 6% | 7% | 7% |
| British Columbia | 12% | 5% | 6% | 7% | 7% |
| Manitoba | 5% | 5% | 6% | 7% | 7% |
| New Brunswick | 13% | 13% | 14% | 15% | 7% |
| Newfoundland and Labrador | 13% | 13% | 14% | 15% | 7% |
| Northwest Territories | 5% | 5% | 6% | 7% | 7% |
| Nova Scotia | 15%* | 13% | 14% | 15% | 7% |
| Nunavut | 5% | 5% | 6% | 7% | 7% |
| Ontario | 13% | 5% | 6% | 7% | 7% |
| Prince Edward Island | 5% | 5% | 6% | 7% | 7% |
| Saskatchewan | 5% | 5% | 6% | 7% | 7% |
| Yukon | 5% | 5% | 6% | 7% | 7% |
