If you sell goods or provide services in Canada, you are required to collect sales tax from your customers on many of the items they purchase.
Depending on the province or territory in which you operate your business, you need to collect either:
- A combination of GST and PST
- GST only
If you operate in an HST-participating province, you will collect sales tax at the following rates:
- New Brunswick: 15%
- Newfoundland and Labrador: 15%
- Nova Scotia: 15%
- Ontario: 13%
- Prince Edward Island: 15%
If you operate in the following provinces, you need to collect 5% GST as well as provincial sales tax (PST), with provincial sales tax rates as follows:
- British Columbia: 7% provincial sales tax (PST) on retail price only
- Manitoba: 7% retail sales tax (RST) on retail price only
- Quebec: 9.975% Quebec sales tax (QST) on retail price only
- Saskatchewan: 6% provincial sales tax (PST) on retail price only
If you operate in the province of Alberta or in one of the three territories (Northwest Territories, Nunavut or the Yukon), you do not need to collect sales tax on goods and services beyond the 5% GST.
British Columbia PST
BC PST applies at a rate of 7% on goods, software and certain services that are purchased or used in the province. Businesses located in Canada but outside BC need to register if they meet all of the following conditions:
- sell taxable goods to customers in BC;
- solicit orders for sale to purchasers in BC by advertising (specifically targeted for the BC market) or other means;
- accept purchase orders (including over the internet) for taxable goods from customers located in BC; and
- deliver goods into BC, whether physically or electronically, or through a third-party courier.
Small sellers are not required to register for PST in BC provided certain conditions are met. Generally, a small seller is defined to be a person who is located in BC but does not make retail sales in an established business location and has $10,000 or less in retail sales per year.
Manitoba levies PST at a rate of 8%. Manitoba also has a small supplier threshold and its rules are similar to those of BC.
A business located outside Manitobbbbba may also be required to register for PST if it has online sales of taxable goods and all of the following conditions are met:
- the goods are acquired to be used in Manitoba (and not for resale);
- the vendor delivers the goods into Manitoba;
- the vendor solicits orders for the sale of goods in Manitoba by advertising or by any other means. This would include solicitation by email targeted towards Manitoba customers; and
- the vendor accepts purchase orders that originate in Manitoba.
Saskatchewan levies PST at a rate of 6%. Similar to BC and Manitoba, Saskatchewan has a small trader threshold rule. To qualify as a small trader, the goods for sale in Saskatchewan must be produced and sold from an individual’s residence, and PST must be paid by the seller on all supplies purchased (in addition to not exceeding a $10,000 annual sales threshold).
Non-resident vendors must register for Saskatchewan PST if they meet all of the following conditions:
- the goods are acquired for use or consumption in Saskatchewan;
- the vendor causes the property to be delivered in Saskatchewan;
- the vendor solicits orders in Saskatchewan through advertising or any other means; and
- the vendor accepts purchase orders that originate in Saskatchewan.
If you are carrying on business in Quebec, there is a small supplier threshold similar to the GST. Once your sales (inside and outside Quebec) exceed the $30,000, you will be required to register for Quebec Sales Tax (QST). Generally if you are operating in Quebec and are required to be registered for GST, you will also be required to register for QST .