Canada does not have one universal checkout tax. Businesses must connect federal GST/HST rules with provincial PST or QST, customer location, supply classification, registration route, and platform responsibility before choosing a rate.
Key takeaways
Most businesses must monitor the C$30,000 small-supplier threshold using the CRA’s prescribed periods.
The customer’s province and the place-of-supply rules determine whether GST or an HST rate applies.
British Columbia, Saskatchewan, Manitoba, and Quebec require separate attention for provincial regimes.
Non-resident digital sellers and platforms may have registration duties under rules effective since July 1, 2021.
GST, HST, PST, and QST explained
GST is the 5% federal goods and services tax. Participating provinces combine the federal and provincial components into HST, while some provinces apply a separate provincial sales tax alongside GST. Quebec administers QST separately.
Do not infer the applicable tax from the seller’s office alone. The nature of the supply and the statutory place-of-supply rules determine the province and rate. Zero-rated supplies are taxable at 0% and may support input tax credits; exempt supplies are treated differently and generally do not.
- Classify the supply as goods, services, or intangible personal property.
- Determine whether it is taxable, zero-rated, or exempt.
- Identify whether a separate PST/QST registration analysis is required.
The C$30,000 small-supplier threshold
For most businesses, the CRA small-supplier threshold is C$30,000 of worldwide taxable supplies, including zero-rated supplies, made by the business and its associates. The timing of mandatory registration differs depending on whether the threshold is exceeded in one calendar quarter or over four consecutive calendar quarters.
If the threshold is exceeded in a single quarter, the supply that pushes the business over the limit can itself be taxable. If it is exceeded over consecutive quarters but not in one quarter, the effective date follows the CRA timing rules. Voluntary registration can be useful for input tax credits but also creates collection, invoicing, filing, and recordkeeping obligations.
- Aggregate associated-business revenue where required.
- Monitor rolling quarters, not only the fiscal year.
- Document the effective registration date and first taxable supply.
Place of supply and the rate to charge
Registered sellers generally charge the rate for the province in which the supply is considered made. For delivered goods, the delivery destination is often central. Services and intangible property, including software and subscriptions, have detailed rules based on addresses, use restrictions, and other facts.
Checkout should retain reliable customer-location evidence and apply consistent rules. A billing address, delivery address, contract, account profile, and IP or payment evidence can serve different purposes; the correct evidence depends on the supply and applicable rule.
- Store the evidence used to choose the province.
- Test address changes, refunds, and bundled supplies.
- Review contracts that restrict where software or rights may be used.
Digital economy and non-resident sellers
Canada’s digital-economy GST/HST measures have applied since July 1, 2021. Non-resident vendors and distribution platform operators supplying taxable digital products or services to Canadian consumers may need to use the simplified registration system after exceeding the applicable C$30,000 threshold.
Separate rules apply to qualifying goods delivered or made available in Canada and platform-facilitated supplies. Determine whether the platform or underlying seller is responsible, whether the customer is registered, and whether the normal or simplified GST/HST framework applies.
- Separate B2C digital supplies from registered business customers.
- Confirm whether a platform facilitates and accounts for the supply.
- Retain customer-status and location evidence.
Input tax credits, returns, and controls
A registrant under the normal system may generally claim input tax credits for GST/HST paid on purchases used in commercial activities, subject to documentation and restriction rules. Simplified-regime registrants do not receive all of the same treatment, so registration route matters.
Reconcile taxable revenue, zero-rated and exempt supplies, GST/HST collected, adjustments, bad debts, and input tax credits before filing. Provincial PST/QST returns should be reconciled separately because their bases, filing systems, and recovery rules are not interchangeable with federal GST/HST.
- Keep valid supplier invoices for ITCs.
- Reconcile each tax account independently.
- Review the CRA and provincial authority pages before rate or process changes.
Create a province-by-province operating map
Build a matrix for every province and territory showing the applicable federal or harmonized regime, any separate provincial tax, registration status, product treatment, invoice requirements, filing frequency, and account owner. A 5% GST result in one province does not establish the result in an HST province or a separate-PST jurisdiction.
Overlay fulfillment and contracting facts. Where goods are delivered, where services are performed, where intangible rights may be used, and which entity contracts with the customer can change the analysis. Use the statutory place-of-supply rule—not a customer-country dropdown—as the decision engine.
- Separate GST/HST, QST, and each PST account in the ledger.
- Record the evidence used to determine customer province.
- Map platform-collected and direct sales separately.
- Review provincial authority guidance alongside CRA guidance.
Move from registration to dependable returns
At registration, document whether the business uses the normal or simplified framework, the effective date, reporting period, fiscal year-end, accounting basis, and input tax credit position. Translate those decisions into invoice templates, checkout logic, credit-note handling, and a filing calendar.
Before each return, reconcile revenue by province, taxable and zero-rated supplies, exempt activity, tax collected, adjustments, bad debts, refunds, and recoverable tax. Compare tax accounts with filed amounts and payment confirmations. Preserve customer-location evidence and the rule version used because a correct total without a traceable basis is weak audit evidence.
- Test the first invoice and first credit note before launch.
- Track filing deadlines independently for every regime.
- Review ITC documentation before claiming credits.
- Retain registration letters and correspondence with workpapers.
Frequently asked questions
What is the GST/HST registration threshold in Canada?
For most businesses, the CRA small-supplier limit is C$30,000 of worldwide taxable supplies, including zero-rated supplies, measured under prescribed quarterly rules.
Is HST charged in every province?
No. HST applies in participating provinces. Other provinces may use 5% GST alone or GST together with a separate provincial sales tax.
Do non-resident digital sellers need to register?
They may. Canada has specific digital-economy rules for non-resident vendors and platform operators, including a C$30,000 threshold for relevant supplies.
Does a Canadian GST/HST registration cover provincial sales taxes?
No. GST/HST registration does not automatically satisfy QST or separate PST obligations. British Columbia, Saskatchewan, Manitoba, and Quebec require their own analysis.
Should checkout use the billing address or delivery address in Canada?
It depends on the supply and the applicable place-of-supply rule. Delivered goods often focus on delivery, while services and intangible property can require different address and use evidence.
Official sources
Reviewed against the following primary sources on Aug 8, 2026.