Your ongoing reporting period is assigned to you during your PST registration, which starts the first day of your registration month. MRDT only applies for any sales of short-term accommodation in British Columbia. So, if you sell accommodation, you must register for the PST and MRDT in British Columbia, unless exempted. You have the option to file and gst pst canada pay tax returns using Manitoba’s TAXcess service, the Taxation Division’s online system.
What Is HST?
Some provinces have opted for a Harmonized Sales Tax (HST), which combines the GST and PST into a single, streamlined tax. GST was first introduced by the former prime minister of Canada Brian Mulroney link. This is a federal tax which is currently equivalent to 5% of the base price of some selected goods and services. For example, if you purchase children apparel you need to pay this tax.
- You can remit electronically, through your bank in Canada, or by mail.
- Hence, your late penalty is a total of $525 to be remitted to the Canada Revenue Agency.
- The interplay between GST, HST, and PST shapes the economic landscape in Canada, impacting prices, business operations, and government revenues.
- This is a federal tax which is currently equivalent to 5% of the base price of some selected goods and services.
- The table below summarizes the type of tax and the tax rate for each province in Canada.
The provinces that only have GST are Alberta, Northwest Territories, Nunavut, and Yukon. That means these provinces charge a 5% sales tax on most goods and services.Provincial Sales Tax (PST) is a tax levied by certain provinces in addition to GST. The provinces that have PST are British Columbia, Manitoba, Quebec, and Saskatchewan.
- In Saskatchewan, PST is 6% of the taxable goods and services consumed or used here.
- To find out if your supply is taxable or exempt, see Type of supply.
- Even if you are considered a small supplier (making less than $30,000 per year), you may elect to register for GST/HST because you can receive reimbursements for the GST you pay on imports.
- In addition to the GST, many provinces have their own Provincial Sales Tax (PST), which is applied to certain goods and services within their jurisdiction.
- You charge 13% HST on the sale because the place of supply is Ontario.
A zero-rated supply 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. After collecting the taxes, you need to pay them to the CRA and applicable provincial governments.
Which provinces in Canada use the HST?
For example, if a good is sold for $1,000, you pay $1,050 after GST is included. If you are calculating only the GST (such as in Alberta, Yukon, Nunavut, and the Northwest Territories), you add 5% to the retail selling price. Combined with the GST, you pay 14.975% on most goods and services. Some goods attract a higher PST, including liquor (10%), vapour products (20%), and vehicles (7% – 20%). The content on this website includes links to our partners and we may receive compensation when you sign up, at no cost to you.
Considerations When Building Your Supply Chain
This means that businesses need to apply the correct GST, HST, or PST rates based on the buyer’s location. For example, an e-commerce business in Alberta selling to a customer in Ontario would charge the Ontario HST rate of 13%. The Goods and Services Tax (GST) is a value-added federal tax applied to most goods and services sold or consumed in Canada.
Do businesses have to register for GST?
Understanding GST, HST, and PST is not just a matter of paying your taxes on time; it’s about maintaining compliance, avoiding penalties, and making informed decisions for your business. Businesses need to register for GST/HST or PST based on their operations and where they sell. Additionally, knowing which tax credits you’re eligible for, such as input tax credits for GST/HST, can save your business money. Follow these three steps, do some research on the specific tax rules for your business, and you’ll be calculating, charging and remitting sales tax with confidence.
You need to check which business expenses you can claim for ITC and which expenses you cannot. Generally, the place of supply refers to the location of the purchasers (your customers). Consequently, GST in Canada is divided into a combination of GST, HST (Harmonized Sales Tax) and PST (Provincial Sales Tax). This guide will give the complete rundown on how and when each is used. For the PST rates of previous years, go to the respective province’s website.
Indigenous Peoples, Governments, and Diplomats are also exempt from GST/HST. If you’re a business importing a variety of goods into Canada—electronics, clothing, maybe even some specialty foods—the following scenario is likely all too familiar. As your shipment arrives, you’re suddenly faced with a slew of taxes. You see GST on some items, HST on others, and in certain provinces, PST comes into play too. It can be confusing to figure out which tax applies to which products and how much you need to pay for each.
For example, in Ontario, the HST rate is 13%, whereas in Nova Scotia, it is 15%. At LCS Customs Broker, our customs brokers are here to help you understand your sales tax obligations and ensure compliance. Whether you need assistance with tax filings, interprovincial documentation, or expert advice on handling GST/HST and PST, we’ve got you covered.
Businesses are responsible for collecting the tax at the point of sale and remitting it to the government. This means that while businesses handle the administrative aspect of GST, the actual cost is passed on to consumers. If you know your place of supply and type of supply, you can use the GST/HST calculator to calculate the amount of GST/HST to charge. If provincial sales tax (PST) is charged in the place of supply, calculate the GST on the price without the PST. In addition to GST, PST, or Provincial Sales Tax, is a tax levied by individual provinces. Each province sets its own PST rate and application requirement.
The Harmonized Sales Tax (HST) is a combination of the federal GST and provincial PST into a single, unified tax. The HST rate varies by province, generally ranging from 13% to 15%. For consumers, the GST is usually included in the final price of goods and services, making it seamlessly integrated into everyday transactions. However, certain items, such as basic groceries, prescription medications, and medical devices, are exempt or zero-rated, meaning they are not subject to GST. Understanding which goods and services are taxable can help consumers make informed purchasing decisions and manage their budgets effectively.
For non-resident digital economy businesses that wish to create GST/HST account, you can read more here. The type of supply refers to the type of goods and services you are selling to your customers. You charge 13% HST on the sale because the place of supply is Ontario. Accracy is not a public accounting firm and does not provide services that would require a license to practice public accountancy. We are offering free 1 Month Basic Bookkeeping to all new customers so you can experience Accracy’s seemless and professional services. Find the CRA’s latest tax relief measures and support for businesses in response to tariffs.
You can remit electronically, through your bank in Canada, or by mail. Payments of $50,000 or more need to be paid electronically or at your financial institution. The CRA has more details about filing periods and steps to remit. The three different tax models used in Canada are GST, HST, and PST. When you purchase a good or service you need to pay an extra percentage on top of the original price to the merchant or service provider.
The Government of Nova Scotia released the proposed transition rules (available in English only) for the HST rate decrease in Nova Scotia effective April 1, 2025. Provinces like British Columbia, Saskatchewan, and Manitoba have their own PST.
Most health, educational, childcare, financial, and legal aid services are also exempt from the QST. Combined with the federal GST, you pay 12% on most goods and services. Some goods and services are exempt or zero-rated for GST but not PST. Goods and services that are free from the GST are referred to as either being ‘exempt’ or “zero-rated”.