Understanding GST/HST rates in Canada can be tricky, but it’s crucial for business operations. Here’s a concise guide with the basics.
GST/HST Rates on Products and Services
The GST/HST rate you charge depends on the “place of supply” rules. That is, where you supply your products and services to, not necessarily where you supply from.
These rules determine whether your transaction is subject to GST at 5% or HST, which can range from 13% to 15%, based on the province.
For Goods: The place of supply is usually where the goods are delivered. For instance, if you ship a product from Ontario to Alberta, you’ll charge the Alberta GST rate of 5%, even though Ontario’s HST rate is 13%.
For Example:
For Services: The rate can vary. Generally, if you obtain an address in Canada in the normal course of business, that’s your place of supply. If the service is performed in Alberta but the customer’s address is in Ontario, charge Ontario’s HST rate.
For Example:
Non-Residents Selling into Canada
Non-resident businesses selling into Canada must consider where their goods or services are received. The GST/HST rate applied will depend on the province of the customer.
Summary Table of GST/HST Rates
In an upcoming post, we’ll delve into Provincial Sales Tax (PST) rules, which add another layer of complexity to sales taxes in Canada.
We hope this helps clarify the basics of GST/HST rate determination for your transactions, ensuring compliance and proper tax collection. For detailed rules and exceptions, refer to the Canada Revenue Agency’s guidelines on place of supply and GST/HST rates on this link.
More Tips and Help
Need help for your specific circumstances? Reach out to our tax team here.
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