Canada VAT/GST Guide

Canada GST Guide for Businesses

Value Added Tax (VAT), known as Goods and Services Tax (GST) in Canada, is governed by the Excise Tax Act.

To streamline the tax system, certain provinces have combined their provincial sales tax with the federal GST to create the Harmonised Sales Tax (HST).

The Canada Revenue Agency (CRA) administers these taxes except in Quebec, where Revenu Québec oversees both the GST and QST (Quebec Sales Tax). A number of other provinces – i.e. British Columbia, Saskatchewan, and Manitoba administer their Provincial Sales Tax independently.

 

Menu

What is the Federal GST Rate in Canada?

5%

Harmonized Sales Tax (HST): Varies by province

  • Ontario: 13%
  • Nova Scotia: Reduced to 14% effective April 2025
  • New Brunswick, Newfoundland and Labrador, Prince Edward Island: 15%
  • Quebec Sales Tax (QST): 9.975%
  • Provincial Sales Tax (PST): Levied in British Columbia, Saskatchewan, and Manitoba, with rates ranging from 6% to 7%

Zero-rated supplies include: exports of goods and services, basic foodstuffs and international transportation.

Certain supplies are exempt including financial services, certain supplies by charities, health care services and education services.

Canada GST Guide

Requirement to Register for GST

  • Mandatory registration: Businesses with annual taxable supplies exceeding $30,000 CAD must register for GST/HST within 30 days of surpassing this threshold.
  • Voluntary registration: Businesses below the $30,000 CAD threshold may opt to register voluntarily.
  • Non-Resident Businesses: Non-resident entities supplying goods or services in Canada may register voluntarily and are not required to appoint a tax representative. However, they should provide a security deposit, typically 50% of the estimated net tax for the first year, ranging from $5,000 CAD to 1 million CAD.
  • The security deposit may not be required where conditions below are fulfilled:- taxable supplies (including zero-rated supplies) in Canada do not exceed $100,000 annually, and- annual net tax is between $3,000 remittable and $3,000 refundable.

Deadlines and Submission

Filing frequency is based on annual taxable supplies:

  • Annual (1.5 million CAD or less): Returns due within three months after the fiscal year-end.
  • Quarterly (More than 1.5 million CAD up to 6 million CAD): Returns due by the last day of the month following the reporting period.
  • Monthly (More than 6 million CAD): Returns due by the last day of the month following the reporting period.

As of January 1, 2024, all GST/HST registrants, except selected financial institutions and most charities, are required to file returns electronically

Launch of New Communication and IT System for eInvoicing

Comply – Global VAT Compliance Management

Our VAT technology platform, Comply helps companies manage their complex, country-specific tax requirements including Canada’s GST obligations.

Using AI and machine learning, our technology puts your VAT data through over 300 automated VAT rules, checking for errors, and preparing VAT returns for approval and submission. Comply provides a full audit trail for the Canadian Tax Authorities.

Schedule a Demo Today
Comply map

Issuing of Tax Invoices

While there’s no strict obligation to issue invoices for all transactions, to claim input tax credits, supporting documentation must include:

  • Supplier’s name and Business Number (BN)
  • Invoice date
  • Total amount paid or payable
  • An indication of the GST/HST charged
  • Buyer’s name or authorized agent’s name (for amounts over CAD 500)
  • Brief description of goods or services supplied
  • Terms of payment (for amounts over CAD 500)

Exemptions from Registration

Entities are exempt from registering if:

  • They qualify as a “small supplier” with revenues below $30,000 CAD
  • Their only commercial activity is the supply of real property by way of sale, other than in the course of a business
  • They are non-residents not carrying on business in Canada.

Beside the online registration the form can be submitted by mail, fax or phone.

The tax authority requires the following information:

  • Turnover of annual taxable supply inclusive worldwide and domestic
  • End of the fiscal year
  • Effective date of registration
  • Reporting period
  • Business information (name, number, type of organization, address)
  • Name and Social Insurance Number of all owners
  • Description of major business activity

Deadlines and Submission

Filing frequency is based on annual taxable supplies:​ 

  • Annual (1.5 million CAD or less): Returns due within three months after the fiscal year-end.​ 
  • Quarterly (More than 1.5 million CAD up to 6 million CAD): Returns due by the last day of the month following the reporting period.​ 
  • Monthly (More than 6 million CAD): Returns due by the last day of the month following the reporting period.​ 

As of January 1, 2024, all GST/HST registrants, except selected financial institutions and most charities, are required to file returns electronically. 

Global VAT Compliance Management Technology

Recent GST Updates in Canada

  • Nova Scotia HST Reduction: Effective April 1, 2025, Nova Scotia reduced its HST rate from 15% to 14% .
  • Temporary GST/HST Relief: A temporary suspension of GST/HST on qualifying items was in effect from December 14, 2024, to February 15, 2025 .

Get the latest VAT News
Subscribe to our Newsletter

    • Comply Icon

      Save time and money

      We fully manage all of your VAT obligations across multiple countries, wherever they arise.

      Success Stories

    • Visibility and Control

      Our VAT Compliance technology delivers full visibility over your historic and current global VAT activities.

      Explore Comply
    • Platforms

      Guaranteed compliance

      Our combination of knowledge-based technology and our in-house VAT experts ensure 100% VAT compliance.

      VAT Compliance

    Contact The
    VAT Experts Today

    Contact Taxback International to find out how we can help you with your VAT Compliance requirements.

     

      ROI Calc Calculate your ROI