Canada Revenue Agency
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Freight transportation services
A supply of a freight transportation service made in Canada can be taxable at 5%, 12%, 13%, or 15%, or zero-rated.
Supplies of freight transportation services taxable at 5%, 12%, 13%, or 15%
Most domestic freight transportation services are subject to the HST for destinations within the participating provinces and to the GST for destinations in the rest of Canada. If you provide a freight transportation service that takes place partly outside Canada, but both the origin and destination are in Canada, it is considered a domestic service. Examples include coastal shipping or shipments between two places in Canada routed through the United States.
Freight transportation service with a destination in more than one province
Where a supply of a freight transportation service has destinations in more than one province, the provision of the service of transporting the goods destined for each province is considered to be a separate supply made for a separate amount equal to the portion of the total amount for the supply that is reasonably attributable to the transportation of the goods to that province. As a result, if a separate supply of a freight transportation service has a destination in a participating province, that supply is considered to be made in that province for an amount equal to the portion of the total amount that is reasonably attributable to that service and the HST would apply to that amount. If a separate supply of a freight transportation service has a destination in a non-participating province, that supply is considered to be made in that province for an amount equal to the portion of the total amount that is reasonably attributable to that service and the GST would apply.
Supplies of zero-rated freight transportation services
International freight services The following international freight transportation services are zero-rated:
- transportation of goods from a place in Canada to a place outside Canada when the freight charge is $5 or more;
- transportation of goods from a place outside Canada to a place in Canada; and
- transportation of goods from a place outside Canada to another place outside Canada, even if the goods pass through Canada.
Domestic freight services
Freight transportation services provided in Canada are generally subject to the GST/HST. However, the following freight transportation services are zero-rated and you do not charge the GST/HST for providing them:
- services that are part of a continuous inbound or outbound international freight movement; and
- services that are being supplied to another carrier under an interlining arrangement that are part of a continuous freight movement.
To learn more, see the following pages:
