Businesses selling goods or services in Canada may be obliged to collect Canadian sales tax. Canada has three different types of sales tax: the federal Goods and Services Tax, various provincial sales taxes, and a combined tax called the Harmonized Sales Tax. Companies located abroad doing business or selling goods or services in Canada may have to register for one or more of these sales taxes, depending on the nature of their business dealings in Canada.
This means registering as collectors of these taxes, charging sales tax as required, filing returns with government bodies, and remitting some or all of the sales tax collected.
Goods and Services Tax (GST)
Canada’s federal sales tax is called the Goods and Services Tax, or GST. Registrants for the federal-level sales tax may have to file returns with the Canadian government monthly, quarterly or annually, depending on the volume of sales.
Learn more about the GST/HST
Obtaining a Rebate on Duty Paid
Even if a company isn’t obligated to register, they may choose to register in some cases particularly if they are importing goods into Canada and paying a duty as those goods enter the country. The duty paid is usually refundable, but only if the company is registered for the federal-level sales tax or GST.
Provincial Sales Tax (PST)
Some provinces also charge a provincial-level sales tax, or PST. The PST is sometimes combined with the GST into what’s called the Harmonized Sales Tax. Registration, filing and remittance rules for HST are the same as for the GST. We usually refer to this as the GST/HST system.
Alberta, the Northwest Territories, the Yukon Territory, and Nunavut charge no provincial sales tax in addition to the GST.
Provincial Sales Tax Rates
Provinces charging a combined sales tax, or HST, include Ontario (13% HST), New Brunswick (15% HST), Nova Scotia (15% HST), Newfoundland and Labrador (15% HST) and Prince Edward Island (15% HST).
GST and HST Rates in Canada
Other provinces charge provincial sales tax but do not combine it with the GST. Instead, they have a separate parallel sales tax system. The provinces of British Columbia (7% PST), Saskatchewan (6% PST), Manitoba (7% PST) and Quebec (9.75% PST) maintain their own PST rates and filing requirements.
We can help
Personal Tax Advisors has experience registering non-Canadian businesses for the various sales tax systems, and filing returns on their behalf. Click the button below to get in touch with us to discuss how we can help your business with your Canadian sales tax.