Frequently asked questions about GST/HST/PST
The GST (Goods and Services Tax) is a federal tax that applies to most goods and services sold in Canada. The HST (Harmonized Sales Tax) is a combination of the GST and the provincial sales tax (PST) in provinces that have chosen to harmonize their sales tax with the GST. The PST is the provincial tax that applies to goods and services sold in provinces that have not harmonized their sales tax with the GST. GST/HST/PST is the Canadian equivalent of VAT.
The GST rate is 5%. The HST rate varies by province, from 13% in Ontario, Nova Scotia and Newfoundland and Labrador to 15% in British Columbia. The PST rate also varies by province.
All Canadian consumers must pay GST/HST/PST on the goods and services they purchase, unless the goods or services are specifically exempted from tax.
Businesses must collect the GST/HST/PST on the goods and services they sell and remit it to the government. Businesses can also claim a refund of the GST/HST/PST paid on goods and services they purchase for their business, subject to eligibility.
Certain goods and services are exempt from GST/HST/PST, including basic groceries, prescription drugs, medical services and financial services.
Businesses can claim an input tax credit (ITC) to recover some of the GST/HST/PST paid on goods and services they purchase for their business.
Businesses must declare and pay GST/HST/PST on a regular basis, based on their turnover. Individuals pay the GST/HST/PST when they purchase goods and services, included in the posted price.
If you don’t pay the GST/HST/PST, you may be subject to penalties and interest. The government may also take action to recover unpaid tax, including seizing property or imposing tax penalties.
The contents of this page are for information purposes only and do not constitute legal, financial or tax advice. For specific advice applicable to your business, please contact ASD Group.
