Free Consultation: +1 (888) 374 0906

I had a call the other day from a merchant in BC who was concerned that they were not collecting Ontario sales tax.  I took a few minutes and cleared up the confusion but thought I should add some details here.

Canada has an interesting tax system.  The federal government collects a value added tax called the Goods and Services Tax, or GST for short.  Most provinces collect some sort of Provincial Sales Tax.  The PST usually applies to a different group of products and is not usually charged on services.  In the maritimes, the GST and PST has been combined into an HST that is collected by the Federal government.  To make things a bit more complex, July 1st, 2010 will see BC and Ontario joining the HST regime.

So what does this mean for a Canadian eCommerce merchant?  A merchant must collect Federal taxes (H/GST) for any order in the county, and Provincial taxes for orders made in any region that they have a physical location.  If you are a merchant in BC with no locations out side of BC, you do not have to collect any other provincial taxes. 

Most merchants calculate taxes based on the location of the person making the purchase. 

If you are a merchants outside of Canada shipping to Canada, with no physical presence in Canada, you do not have collect any taxes.

With the exception of Quebec and PEI, provincial taxes are only applied to the sum of the taxed products.  Quebec and PEI charge provincial taxes on the AFTER tax amounts resulting in a slightly higher tax rate.
















































































Province



HST



GST



PST



Total Tax



Alberta


 

5%


 

5%



British Columbia


 

5%



7%



12%



Manitoba


 

5%



7%



12%



New Brunswick



13%


  

13%



Newfoundland and Labrador



13%


  

13%



Nova Scotia



13%


  

13%



Ontario


 

5%



8%



13%



Prince Edward Island


 

5%



10%



15.5%*



Quebec


 

5%



7.5%



12.875%*



Saskatchewan


 

5%



5%



10%



 

If you think that is complicated, just be thankful you are not based in New York or California!
Write A Comment

Post A Comment

 
Submit

Sign up for email updates from our team

View Our Privacy Policy or Terms of Use