GST/HST calculation in Canada depends on the province where you are doing the business. There are provinces which have combined provincial taxes with the Goods and Services Tax. These provinces charge a Harmonized Sales Tax (HST) on goods and services. There are some provinces which have no provincial sales tax. These provinces charge a separate Provincial Sales Tax (PST).
Provinces which charge HST
The provinces which charge HST are Ontario, Prince Edward Island, New Brunswick, Nova Scotia and Newfoundland/Labrador. The HST rates for these provinces are:
Ontario – 13%
New Brunswick – 13%
Prince Edward Island -14%
Nova Scotia – 15%
Newfoundland & Labrador – 15%
Provinces which charge PST
If you have your business where PST is applicable, you have to charge both GST and PST. The GST on the price of the goods has to be applied before you apply PST.
These are the provinces were PST is applicable – Manitoba, Saskatchewan and British Columbia. The PST rates for these provinces are:
Saskatchewan – 6%
British Columbia – 7%
Manitoba – 8%
Quebec – 9.975%
Provinces which do not have PST
The provinces which do not have PST (Provincial Sales Tax) are the Northwest Territories, Alberta, Nunavut and Yukon. The GST in these provinces is calculated by adding 5% of the product’s sale price and adding it to the bill.
Are the exceptions from GST/HST?
In case your business garners annual revenue of $30,000 or less, you are considered to be a small business and are exempted from registering to collect and remit GST/HST. For provinces which charge PST you can qualify for the small supplier exception for the federal GST but in the provinces of Saskatchewan and Manitoba, you will still have to charge PST/RST.
There are some goods which are exempt or zero-rated. This means that you do not charge HST on the customer invoice.
Is GST/HST applicable on sale of goods and services to another province?
When you wish to sell goods or services to another province, you have to charge GST/HST based on the rate charged in the destination province.
Is GST/HST applicable on sale of goods and service out of Canada?
When you ship goods to another country, you do not have to charge GST/HST. However, there might be export/excise taxes involved in the transaction.
This is how you charge GST/HST on your goods and services in different provinces of Canada. We have seen that the tax rates differ based on the provinces. The use of HST calculator can help you do the calculation according to the province. Doing calculations on HST calculator is fast and accurate. However, it is important to learn about the tax rates applicable in different provinces so that you have the idea as to how much tax you need to collect from your customers.
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