GST/HST
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OVERVIEW
Most goods and services sold in Canada are subject to sales tax. The Goods and Services Tax (GST) is a federal sales tax that applies at a rate of five per cent across the country. Provincial Sales Tax (PST) has different policies depending on the province. Some provinces have their own PST, while others only use GST.
The Harmonized Sales Tax (HST) is the result of Ontario, Prince Edward Island, New Brunswick, Nova Scotia, and Newfoundland and Labrador harmonizing their PST with GST.HST applies at a rate of 15 per cent in all these provinces, except Ontario where the rate is 13 per cent.
Any entity that carries on a business in Canada, sells taxable supplies, and is not a small supplier is required to register with the Canadian Revenue Agency (CRA) for a GST/HST account. Although sales tax is paid by the buyer at the point of sale, it is the responsibility of registered entities to charge GST/HST on their taxable sales and remit it to the CRA.
Taxable supplies
A taxable supply is a good or service on which GST/HST must be charged and remitted. In general, any good or service that is not an exempt supply will be a taxable supply.
An exempt supply is a good or service on which GST/HST cannot be charged. Examples of this type of supply include residential real estate rental and medical services.
A zero-rated supply is a good or service on which GST/HST is charged, but at a rate of zero per cent. Exports and most grocery and agricultural products are examples of zero-rated supplies.
| Province | Type | PST | GST /HST | Total Tax Rate | Notes |
|---|---|---|---|---|---|
| Alberta | GST | 5% | 5% | ||
| British Columbia | GST + PST | 7% | 5% | 12% | |
| Manitoba | GST + PST | 7% | 5% | 12% | As of July 1, 2019 the PST rate was reduced from 8% to 7%. |
| New Brunswick | HST | 15% | 15% | As of July 1, 2016 the HST rate increased from 13% to 15%. | |
| Newfoundland and Labrador | HST | 15% | 15% | As of July 1, 2016 the HST rate increased from 13% to 15%. | |
| Northwest Territories | GST | 5% | 5% |
| Province | Type | PST | GST /HST | Total Tax Rate | Notes |
|---|---|---|---|---|---|
| Nova Scotia | HST | 15% | 15% | ||
| Nunavut | GST | 5% | 5% | ||
| Ontario | HST | 13% | 13% | ||
| Prince Edward Island | HST | 15% | 15% | ||
| Quebec | GST + *QST | 9.975% | 5% | 14.975% | |
| Saskatchewan | GST + PST | 6% | 5% | 11% | |
| Yukon | GST | 5% | 5% |
Small suppliers
A small supplier is an entity whose total revenue from the sale of taxable supplies from the previous four consecutive calendar quarters is less than $30,000. This also includes all revenues on taxable supplies from associated companies. Small suppliers are not required to register for GST/HST. However, registration will be required once the entity ceases to be a small supplier as a consequence of crossing the $30,000 threshold.
If the small supplier makes a sale that pushes their total revenue over $30,000 for the current calendar quarter, the entity immediately stops being a small supplier at the time of that sale. Tax must be collected on that sale and every subsequent sale. The entity should register with the CRA for GST/HST purposes as soon as possible.
GST/HST Returns
An entity can choose to file more frequently than required but cannot file less frequently. For example, an entity required to file annually could file monthly if they so choose, but an entity required to file monthly could not file annually. Reporting frequency is adjusted as required annually by the CRA.
Note:- A return must be filed even if the business had no transactions or tax to remit for the reporting period. Failure to remit tax or file a return by the appropriate deadline can result in monetary penalties being assessed by the CRA.
If you believe that your business may be required to register for GST/HST, are interested in registering voluntarily, or have any other questions regarding sales taxes in Canada, Accountopedia team is ready to answer your questions.