GST/HST, PST or QST: What to Charge Clients in Other Provinces

Do I charge my own province's rate or my customer's?

Usually your customer's province, not yours. You charge the rate of the province where the sale is made under the place-of-supply rules (the rules for which province a sale belongs to), and where your business sits does not decide it (CRA). In the CRA's own example, a Saskatchewan web designer working only in Saskatchewan for an Ontario company charges Ontario HST at 13% (Memorandum 3-3-6, Example 2).

A case stops being simple when the client has offices in several provinces, you work on site somewhere else, you may also owe PST, RST or QST, or past invoices used one rate for everyone. Gather the contract, the address of the client office that hired you, delivery addresses, where the work was done, and every sales tax number you hold. This page assumes you are registered for GST/HST; if you are not, see when to register for GST/HST.

What is the total sales tax on an invoice to a customer in each province?

For an invoice to a customer in another province, start with the GST or HST rate for the province where the sale is made (CRA rates). A separate provincial tax is added on top only in four provinces, and only when you are registered for it or must be: see PST and RST and QST.

HST already includes the provincial part, so nothing is added on top. These rates apply to taxable sales: a zero-rated sale, such as basic groceries, carries no GST/HST wherever in Canada it is made (CRA). PST, RST and QST have their own registration tests and rules on what is taxable, separate from GST/HST: see PST and RST and selling into Quebec.

Goods: shipped, delivered or picked up, which province's rate applies?

Goods follow where the customer receives them. If you mail or courier the goods, or hand them to a carrier you hire to deliver them, the sale is made in the destination province. If the customer picks them up at your premises, or sends its own carrier, the sale is made where you hand them over (Memorandum 3-3-3; Regulations).

So a British Columbia buyer who collects goods at a New Brunswick shop pays New Brunswick HST, even when driving them home (Memorandum 3-3-3, Example 2). If the customer arranged the carrier, telling that carrier the goods are ready does not make it your carrier. What the customer does next is its own duty, not yours: a buyer who takes goods out of an HST province within 30 days may claim back the provincial part (Excise Tax Act, s. 261.1), and a customer in an HST province charged only GST on goods, services or software it uses there may have to self-assess the provincial part (s. 220.05, s. 220.08). An online shop therefore charges by each order's delivery province, so one store can charge several rates. Keep shipping records showing the destination.

Services: which client address counts when the client has several offices?

Use the client's home or business address that you obtain in the normal course of the deal. If you obtain only one, that address decides. If you obtain several, use the one most closely connected with the work, which is usually the contracting address: the office that hired you (Memorandum 3-3-6; Regulations, section 13).

• You cannot pick. The rule gives no choice among a client's addresses.
• Email and IP addresses do not count, because they are not physical places. A post office box is not a business address.
• Head office or branch: a head office that hires you is the contracting address, even if you deal day to day with a branch elsewhere (Memorandum 3-3-6, Example 11). A branch that issues the purchase order under a head-office agreement can be the contracting address instead (Memorandum 3-3-6, Example 14).
• No contracting address: use the address you deal with and use most for the work. With no home or business address, another Canadian address such as a billing address or post office box can apply.
• Working at the client's site in another province does not by itself change the answer: the address rule still applies unless one of the rules in the next section does.
• No Canadian address at all: where most of the work is done decides; for a client outside Canada, see charging GST/HST to US customers.

Which services follow where the work is done instead of the client's address?

A few kinds of services have their own rules that override the address rule (Memorandum 3-3-6-1).

Advisory, consulting and professional services are excluded from the personal-service rule, even when delivered face to face, so they stay under the client-address rule (Regulations, section 17). In the CRA's example, a Manitoba painter working on an Ontario warehouse charges Ontario HST (Memorandum 3-3-6-1, Example 29).

Software, digital downloads and online subscriptions: which rate applies?

Most software licences, downloads and subscriptions are intangible property (something you cannot touch). If it can be used only or mainly outside the HST provinces, only GST applies. Otherwise the customer's home or business address you obtain usually decides, as long as it can be used in that province. If you obtain no address (an email address does not count), charge the highest rate among the provinces where it can be used (Memorandum 3-3-5; Regulations, sections 6 to 8).

The CRA's examples: an Ontario online seller of a digital album to a buyer with a British Columbia home address charges only GST at 5% (Example 18). A lawyer buys an online subscription; the seller has the firm's Ontario office address and a Quebec billing address, and the Ontario office, as the contracting address, decides: HST at 13% (Example 21). Some online offerings are services rather than property: remote tech support and data storage have their own rule (Regulations, section 32). Check which rule fits before relying on it. PST, RST or QST may also apply to software and digital products under each province's own rules: see PST and RST and Quebec.

Do I need a separate registration or return for each HST province, and how do I show the tax?

No separate GST/HST registration is needed per province: a business registered for GST is also registered for HST (RC4022). All GST and HST you charge, at every rate, is reported on the same return (CRA); a business located in Quebec files that return with Revenu Québec on its forms (RC4022). Filing and input tax credits covers the lines and the Quick Method. PST and RST are separate accounts and returns with each province; QST is a separate Revenu Québec account.

On the invoice, show the tax amount clearly, or state that the price includes the tax (Excise Tax Act, s. 223). For HST, show the total HST rate; do not split it into federal and provincial parts (RC4022). On invoices of $100 or more, show your GST/HST number: a business client needs it to claim its input tax credit. Reclaiming tax you paid suppliers in other provinces is covered in the same filing guide.

Example

These examples are illustrative; amounts are in Canadian dollars.

Alberta developer, Ontario client

A GST-registered web developer in Calgary is hired by a client's Toronto head office. All work happens in Calgary. The only business address obtained is in Ontario, so a C$10,000 invoice carries C$1,300 of HST at Ontario's rate, not GST of C$500.

BC consultant on site in Montreal

A British Columbia consultant works on site in Montreal for a client that contracts from its Montreal office. Quebec is not an HST province, so the invoice shows C$10,000 plus C$500 GST. Whether the consultant must also register for and charge QST is covered in doing business in Quebec.

Ontario seller ships to Saskatoon

An Ontario online seller ships a C$200 order to Saskatoon. Saskatchewan is not an HST province, so the invoice shows C$10 GST and no HST. Whether Saskatchewan PST also applies depends on Saskatchewan's licence test for sellers outside the province: see PST and RST.

Different for you?

• You already charged the wrong rate, or a client rejected the invoice: see charged the wrong GST/HST rate, and get bookkeeping help to review past invoices across several provinces.
• You sell into BC, Saskatchewan or Manitoba, or through a marketplace: see PST and RST registration.
• You have Quebec customers or workers: see doing business in Quebec.
• You are under the small-supplier limit or not yet registered: see when to register for GST/HST.
• Your customers are outside Canada: see charging GST/HST to US customers.
• Your business is outside Canada and sells into Canada: see non-resident and digital sellers.
• Your business itself operates in another province: see operating in more than one province for income tax.