The Canadian Tax Framework

Unlike U.S., Canada has a dual tax system combining federal and provincial taxes. Businesses must navigate multiple tax regimes depending on where they will sell and what they will sell.

GST  (Goods & Services Tax)

Federal tax administered by the CRA (Canada Revenue Agency)

The GST rate currently is set 5%

Registration required when taxable sales exceed $30,000 CAD in any 12-month period, a small supplier threshold.

GST applies to most goods and services.

 

HST — Harmonized Sales Tax

A combination of GST and Provincial tax, collected as a single tax rate by CRA.  This applies to a participating province, that have harmonized with federal GST system.

 

PST — Provincial Sales Tax

Non-harmonized provinces levy their own separate PST, and administered by the provincial taxing authority.

Businesses must register with each province separately. Threshold could vary by province.

Some provinces have an economic nexus, similar to US one.

 

QST — Quebec Sales Tax 

QST is administered by Revenu Quebec.  Registration requirements are similar to the GST.  QST tax is reported on Revenu Quebec portal.