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Canada GST, HST, PST Guide – Know the Tax System by Province

📌 What You Need to Know First

Canada doesn't follow one single tax system across the whole country. Instead, it mixes federal and provincial taxes, and that makes things interesting — and a bit confusing.
Here’s the breakdown:
  • GST (Goods and Services Tax) – Flat 5% across all of Canada
  • PST (Provincial Sales Tax) – Varies by province, charged separately in some areas
  • HST (Harmonized Sales Tax) – A combined version of GST + PST used in certain provinces
Simple? Not really. But we’ll make it easy.

🧾 GST: The Federal Layer

GST is like Canada’s national sales tax. It’s a flat 5% charged on most goods and services. If you run a business anywhere in Canada and your revenue crosses $30,000 CAD in 12 months, you’ve got to register and collect GST.
Even if you’re below the limit, many freelancers and small biz owners register voluntarily just so they can claim Input Tax Credits (ITCs) — basically a refund for the GST you’ve already paid on your expenses.

🔄 What Is HST?

Some provinces decided, “Why run two systems? Let’s merge.” So they use HST instead of GST and PST separately.
Here’s where HST applies in 2025:
  • Ontario – 13%
  • Nova Scotia, New Brunswick, Newfoundland & Labrador, PEI – 15%
One tax. One registration. One return. Makes life easier for both business owners and the government.

🏷️ PST: The Provincial Twist

In provinces that didn’t adopt HST, you have to collect PST separately from GST. This means two different registrations, and sometimes different rules.
Examples:
  • British Columbia – 7% PST
  • Saskatchewan – 6% PST
  • Manitoba – 7% PST
  • Quebec – 9.975% QST (special version, like PST but handled differently)
So if you sell a product in BC, you might charge 5% GST + 7% PST = 12%. But if it’s a service? Maybe PST doesn’t apply. Depends on local rules.

🌐 Digital Sales in 2025

Selling digital products, apps, software, or subscriptions from outside Canada? If your revenue from Canadian customers crosses $30,000 CAD, you’re on the hook for GST/HST. Even non-Canadian businesses now need to register and charge tax.
Think: Netflix, Shopify apps, online courses — all covered.

📅 Filing and Deadlines

Businesses file GST/HST returns either:
  • Monthly
  • Quarterly
  • Annually
Depends on revenue. You submit them online via CRA’s My Business Account or using accounting tools like QuickBooks or Wave.
Late? You’ll face penalties and interest — CRA doesn’t forget.

🤔 Is GST/HST Better Than VAT?

Kind of. Unlike VAT in the EU, Canada’s tax system is split by region, so the federal government doesn’t control everything. But the Input Tax Credit system is very similar to VAT — and helps businesses avoid tax-on-tax situations.