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GST/HST - General information
Basic information on how GST/HST works, what is HST, what we mean by taxable, zero-rated, and exempt supplies, place of supply rules, importing and exporting, and buying or selling a business.
How GST/HST works
The GST is a tax that applies to the supply of most property and services in Canada. The provinces of Nova Scotia, New Brunswick, and Newfoundland and Labrador, referred to as the participating provinces, harmonized their provincial sales tax with the GST to create the HST. Generally, the HST applies to the same base of property and services as the GST. In some participating provinces, there are point-of-sale rebates equivalent to the provincial part of the HST on designated items. For more information, see Reason code 16.
As of July 1, 2010, Ontario harmonized its retail sales tax with the GST to implement the HST at the rate of 13% and British Columbia harmonized its provincial sales tax with the GST to implement the HST at the rate of 12%. Also, as of July 1, 2010, Nova Scotia increased its HST rate from 13% to 15%.
For the rates of each province, see GST/HST rates.
Almost everyone has to pay the GST/HST on purchases of taxable supplies of property and services (other than zero-rated supplies). A limited number of sales or supplies are exempt from GST/HST.
Although the consumer pays the tax, businesses are generally responsible for collecting and remitting it to the government. Businesses that are required to have a GST/HST registration number are called registrants.
Registrants collect the GST/HST on most of their sales and pay the GST/HST on most purchases they make to operate their business. They can claim an input tax credit, to recover the GST/HST paid or payable on the purchases they use in their commercial activities.
GST/HST registrants must meet certain responsibilities. Generally, they must file returns on a regular basis, collect the tax on taxable supplies they make in Canada, and remit any resulting net tax owing.
Note
In Quebec, Revenu Québec administers the GST/HST. If your business is located in Quebec, visit the Revenu Québec Web site.
What is HST?
Nova Scotia, New Brunswick, and Newfoundland and Labrador have combined their respective provincial sales taxes with the GST to create a harmonized sales tax (HST) in each of these provinces. The HST rate in New Brunswick, and Newfoundland and Labrador is 13%, composed of a 5% federal part (equal to the 5% GST) and an 8% provincial part.
As of July 1, 2010, Nova Scotia increased its HST rate from 13% to 15%.
Since July 1, 2010, Ontario and British Columbia (BC) combined their respective provincial sales taxes with the GST to implement an HST in each of these provinces. The HST rate for Ontario is 13% (a 5% federal part and an 8% provincial part). The HST rate for BC is 12% (a 5% federal part and a 7% provincial part).
Those provinces that have combined their respective provincial sales taxes with the GST to create the HST are known as participating provinces.
Generally, GST/HST registrants must charge and account for the GST on taxable supplies (other than zero-rated supplies) of property and services made in Canada. However, where GST/HST registrants make taxable supplies (other than zero-rated supplies) in Canada, and those supplies are made in a participating province, they must charge and account for the HST instead of the GST.
