Canada: Domestic Corporate Taxation
Sales Taxes and VAT
Most goods and services supplied in Canada are subject to a goods and services tax (GST) of 5%; in addition, each province charges its own sales tax.
Nova Scotia, New Brunswick, and Newfoundland and Labrador have, however, introduced a “harmonised sales tax” (HST), which combines the GST and the local sales tax. HST applies to the same goods and services as the GST, and is charged at a rate of 13%. Nova Scotia announced in April, 2010 that it would increase HST from 13% to 15% with effect from 1 July, 2010. Ontario and British Columbia introduced the HST on 1 July, 2010 at 13% and 12% respectively.
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.