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Canada: Domestic Corporate Taxation

Sales Taxes and VAT

This page was last updated on 5 June 2019.

Most goods and services supplied in Canada are subject to a federal goods and services tax (GST) of 5%. In addition, each of the provinces (though none of the territories) charges its own kind of sales tax.

In recent years, Nova Scotia, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Prince Edward Island have introduced a ‘harmonised sales tax’ (HST), which, like the federal GST, is collected by the Canada Revenue Agency (CRA). HST is also a value added rather than cascading tax, and applies to the same goods and services as the GST. The HST component is levied at a rate of 8% in Ontario and 10% in the other four provinces. This brings the total tax payable to 13% and 15% respectively.

British Columbia introduced HST on 1 July 2010, but then, as a result of a referendum, elected to return to the separate sales tax / GST system on 1 April 2013.

A number of exemptions apply, for example to residential accommodation, medical and health services, educational services, and financial services. Zero rating applies to certain goods and services, including exports, basic foodstuffs, prescription drugs, and many transportation services.

 

 

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