I was working with a client today who will soon be launching an e-commerce website and we were going over the taxes to be collected through the site. It’s a little bit involved with all of the different provincial tax rates we have in Canada, so I thought I’d post the details for future reference.
In every province or territory of Canada, we must pay a federal tax on most items we purchase. In most provinces of Canada, we must also pay a provincial tax. Sometimes these taxes are displayed separately (federal: GST, provincial: RST, PST, or QST), sometimes they are combined into a single, harmonized tax (HST).
For products purchased and delivered within the same province:
In some provinces the provincial and federal portions are blended into a single “harmonized” tax.
For example, in Ontario, one would pay a single 13% tax
| Subtotal: |
$ 5 |
| Shipping: |
$ 5 |
| HST: |
$ 1.30* |
| Total: |
$ 11.30 |
* note, the taxes are also applied to the shipping as well as any handling fees.
In some provinces the provincial and federal portions are separate.
For example, in Manitoba one would pay a 5% federal and a 7% provincial tax. Both of these taxes are usually displayed separately on an invoice, as in:
| Subtotal: |
$ 5 |
| Shipping: |
$ 5 |
| RST: |
$ .70 |
| GST: |
$ .50 |
| Total: |
$11.20 |
In two provinces (Prince Edward Island and Quebec), the provincial tax is applied to the total with GST already applied.
For example, in PEI:
| Subtotal: |
$5 |
| Shipping: |
$5 |
| GST: |
$.50 |
| SubTotal: |
$10.50 |
| PST: |
$1.05 |
| Total: |
$11.55 |
For products purchased in one province and delivered to another province:
If you are shipping the product out of your province to a province that participates in HST, you are required to collect HST at the provinces rate (different provinces have different HST rates).
Ex. Nova Scotia
| Subtotal: |
$ 5 |
| Shipping: |
$ 5 |
| HST: |
$ 1.50 |
| Total: |
$11.50 |
If you are shipping the product out of your province to Prince Edward Island or Saskatchewan, you are required to collect GST, and encouraged to collect PST (at the provinces applicable rates).
Ex. Saskatchewan
| Subtotal: |
$ 5 |
| Shipping: |
$ 5 |
| PST: |
$ .50 |
| GST: |
$ .50 |
| Total: |
$11.00 |
If you are shipping the product out of your province to Manitoba, you are required to collect GST and Manitoba’s RST
| Subtotal: |
$ 5 |
| Shipping: |
$ 5 |
| RST: |
$ .70 |
| GST: |
$ .50 |
| Total: |
$11.20 |
If you are shipping the product out of your province to Quebec, you are required to collect GST and QST (Quebec’s RST).
| Subtotal: |
$5 |
| Shipping: |
$5 |
| GST: |
$.50 |
| SubTotal: |
$10.50 |
| QST: |
$1.00 |
| Total: |
$11.50 |
If you are shipping the product out of your province to Alberta, Nunavut, Northwest Territories, or Yukon, you are required to collect GST
| Subtotal: |
$ 5 |
| Shipping: |
$ 5 |
| GST: |
.50 |
| Total: |
10.50 |
For products delivered outside of Canada:
No tax would be charged.
| Subtotal: |
$ 5 |
| Shipping: |
$ 5 |
| Total: |
$10.00 |
Exemptions:
Certain products may be exempt from the following:
- provincial taxes (RST, PST, or QST),
- the federal tax (GST),
- both provincial and federal tax
- HST
- the provincial portion of HST
Certain types of customers can be exempt from the following:
- provincial tax
- the provincial portion of the HST
Taxes & Rates:
- British Columbia: HST 12%
- New Brunswick: HST 13%
- Newfoundland and Labrador: HST 13%
- Nova Scotia: HST 15%
- Ontario: HST 13%
- Manitoba: GST 5% + RST 7% on retail price only
- Prince Edward Island: GST 5% + PST 10% on retail price including goods and services tax
- Quebec: GST 5% + QST 9.5% on retail price including goods and services tax
- Saskatchewan: GST 5% + PST 5% on retail price only
- Alberta: GST 5%
- Northwest Territories: GST 5%
- Nunavut: GST 5%
- Yukon: GST 5%
References:
http://www.canadabusiness.ca/eng/guide/5155/#c5166
http://news.ontario.ca/rev/en/2010/06/continuing-point-of-sale-exemption-for-ontarios-first-nations.html
