How much GST/HST is charged to customers outside of your province?
Charging the right sales tax (GST/HST) is crucial for a number of reasons: first, as a business owner, you must comply with the federal rules. Secondly, miscalculating it impacts your filing and the total you’re going to end up paying CRA. Therefore, you’d want to make sure you’re following the applicable rates.
The rates depend on a concept known as “place of supply”, which essentially means: the province your sales were provided to.
Current rates are:
5% - Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec, Saskatchewan and Yukon.
13% - Ontario
15% - New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island
Rules of place-of-supply in a nutshell
Selling goods
If the seller delivers goods to the customer, the place of supply is the province to which the goods are delivered.
Example: a customer orders shoes online. The store is located in Ontario, however the customer is from Manitoba. In this scenario, the store would charge 5% to the customer.
Providing services
1) If you have your client’s address in Canada, then it will be used for determining the GST/HST rate.
Example: a customer from New Brunswick signed a contract with you, a social media manager from BC for managing their social media accounts. The GST/HST rate to charge would be 15%
2) If you do not have your customer’s address in Canada, and all the work is performed in one province, then this would be the province by which the GST/HST rate would be determined
Source: CRA Website
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