GST vs HST vs PST: Which Tax Does Your Corporation Charge? (2026 Rates)

The Three Sales Taxes in Canada

Canada does not have a single national sales tax. Instead, businesses deal with up to three overlapping systems: GST (federal), PST (provincial), and HST (a combined federal-provincial tax). Which one your corporation charges depends on where the supply is made and the province involved.

Getting this wrong means either overcharging customers or owing money to the CRA out of pocket.

2026 Province-by-Province Rates

These are general rates from CRA’s provincial rate table. Exemptions, zero-rated supplies and special provincial rates still apply; a combined rate is not a rule that every purchase attracts both taxes.

When You Must Register for GST/HST

For most businesses, the small-supplier calculation includes worldwide taxable supplies, including zero-rated supplies and relevant associates. It excludes specified items such as capital-property sales. The timing has two different tests:

• More than $30,000 in one calendar quarter: charge GST/HST on the sale that crosses the limit. Registration is effective no later than that sale; register within 29 days of the effective date.
• More than $30,000 over up to four consecutive calendar quarters, but not one quarter: small-supplier status ends at the end of the following month. The effective registration date is no later than the first supply after that status ends; register within 29 days of that effective date.

See CRA's registration examples and our threshold guide. Voluntary registration can allow eligible ITCs but also requires charging tax and filing returns. Compare those obligations with your purchases and customers before electing; it is not automatically best for every new business.

Charging the Right Rate: Place of Supply Rules

The tax rate you charge is based on where the supply is considered to be made, not where your corporation is located.

Services

For a service under the general rule, the relevant Canadian recipient address obtained in the ordinary course of business is important. With multiple addresses, use the one most closely connected with the supply. Special rules apply to services such as those connected with real property. A BC consultant supplying a service located in Ontario under these rules generally charges 13% HST.

Physical Goods

For tangible goods, delivery or making the goods available generally determines the province. A taxable product delivered in Nova Scotia attracts 14% HST. Apply the actual contract and any special rules using CRA’s place-of-supply guide.

Digital Products and SaaS

Classify the contract before choosing the rate. Downloaded software rights are generally intangible personal property, while hosting or support can be a service; a bundle depends on its principal object. There is no blanket rule that every SaaS subscription is a service. Use CRA’s electronic-supply descriptions.

Common Edge Cases

Out-of-Province Clients

If the place of supply is Ontario, the normal GST/HST registration covers the applicable HST; there is no separate Ontario HST registration. BC PST, other provincial sales taxes and Quebec administration have their own rules. The invoice address alone does not settle every tax obligation.

Zero-Rated and Exempt Supplies

Some supplies are taxed at 0% (zero-rated) or completely exempt:

• Zero-rated: qualifying basic groceries, prescription drugs, medical devices and exports
• Exempt: financial services, residential rent, most health and dental services

A registrant making zero-rated supplies can claim eligible ITCs when the usual commercial-use, documentation and timing requirements are met. Expenses for exempt supplies generally do not generate ITCs. See CRA's supply classifications.

Mixed Supplies to Multiple Provinces

Determine whether the agreement creates one supply or several, then apply the relevant place-of-supply rule to each. Do not split one service across provinces just because a customer operates in several locations.

Filing and Remittance

The normal assigned reporting period depends on annual taxable supplies and associated-person rules, with exclusions. The following thresholds summarize the usual assignment:

Check the reporting period assigned to your account. Eligible businesses can elect a more frequent period; the reporting-period threshold is not the Quick Method eligibility threshold. See CRA’s filing-frequency guidance.

How Ledg helps

Tracking which rate to charge for each client province and reconciling ITCs across multiple jurisdictions is exactly the kind of repetitive work that leads to errors. Ledg fills in your province's rates on each entry, lets you override them for out-of-province sales, and totals GST/HST collected and paid for each filing period.

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This article is for informational purposes only and does not constitute tax advice. Consult a qualified accountant for your specific situation.