Goods and Services Tax (GST) and Harmonized Sales Tax (HST)
Canada Revenue Agency (CRA)
Last Verified:
2006-07-28
Act:
Excise Tax Act, R.S.C. 1985, c. E-15
Regulation:
Not applicable.
Related Reading
More Information
To Whom Does This Apply?
On July 1st 2006, the rates of the GST and the HST were reduced. The rate of the GST was reduced from 7% to 6%. The rate of the HST was reduced from 15% to 14%.
Most persons and organizations engaged in commercial activities in Canada, who have over four consecutive calendar quarters worldwide taxable sales of more than $30 000, must register for and collect the Goods and Services Tax / Harmonized Sales Tax (GST/HST).
All taxi operators must register for GST/HST, regardless of their revenues.
Summary
Most goods and services sold or provided in Canada are taxable at the rate of 6% (GST) or 14% (HST). The HST applies in the provinces of New Brunswick, Nova Scotia and Newfoundland and Labrador. Certain items, such as sales of basic groceries and prescription drugs are taxable at a rate of 0%. These are referred to as zero-rated goods and services. A limited number of goods and services are exempt from the GST/HST.
The GST/HST applies to most transactions throughout the production and marketing process. Businesses and organizations required to, or who voluntarily choose to, register for the GST/HST are referred to as registrants. Business must register to obtain a Business Number with a GST/HST account. Registrants can claim a credit to recover the GST/HST that is paid or payable on purchases used to provide taxable goods and services. This credit is called an input tax credit and can be claimed for the GST/HST paid or payable for goods or services acquired or imported for use, consumption or supply in their commercial (taxable) activities.
GST/HST registrants who provide taxable goods or services have to charge and collect the GST or HST on their sales. If the GST/HST collected is greater than the GST/HST paid or payable, the difference is sent to the CRA. (Registrants in Quebec send their payment to the ministère du Revenu du Québec.) If the GST/HST collected is less than the GST/HST paid or payable, a refund can be claimed.
PROVINCIAL GST/HST/PST Rates
|
Province
|
GST/HST Rate (%)
|
PST Rate (%)
|
Combined Rate (%)
|
|
Alberta
|
6
|
not applicable
|
6
|
|
British Columbia
|
6
|
7
|
13
|
|
Manitoba
|
6
|
7
|
13
|
|
New Brunswick
|
14
|
not applicable
|
14
|
|
Newfoundland & Labrador
|
14
|
not applicable
|
14
|
|
Northwest Territories
|
6
|
not applicable
|
6
|
|
Nova Scotia
|
14
|
not applicable
|
14
|
|
Nunavut
|
6
|
not applicable
|
6
|
|
Ontario
|
6
|
8
|
14
|
|
Prince Edward Island
|
6
|
10 *
|
16.7 *
|
|
Quebec
|
6
|
7.5 *
|
13.95 *
|
|
Saskatchewan
|
6
|
5
|
11
|
|
Yukon Territory
|
6
|
not applicable
|
6
|
* In Quebec and Prince Edward Island only, the GST is included in the provincial sales tax base. You are also charged PST on GST, hence the higher than expected combined rate.
Quebec
In Quebec, the GST/HST is administered by the ministère du Revenu du Québec (MRQ). Contact the MRQ by calling, toll-free, 1-800-567-4692 or by visiting the MRQ Web site.
All publications are available in paper copy by calling 1-800-959-2221.
If you require personal assistance, contact the Tax Service Office closest to you (see Related Reading: Business Window - Supplement or CRA's Web site for a listing of the Tax Service Offices and Tax Centres).
DISCLAIMER
Information contained in this section is of a general nature only and is not intended to constitute advice for any specific fact situation. For particular questions, the users are invited to contact their lawyer. For additional information, see contact(s) listed below.
Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Quebec, Saskatchewan, Yukon Contact(s):
See National Contact.
National Contact(s):
Canada Revenue Agency
Toll-free (information): 1-800-959-5525 (Business Enquiries and Registrations)
Toll-free (publications): 1-800-959-2221 (Forms and Publications)
Web site:
http://www.cra.gc.ca/menu-e.html
