Sales tax for online stores in Canada: GST, HST, QST and PST explained

Four sales taxes, three levels

Canada has a federal sales tax, the GST (goods and services tax), administered by the Canada Revenue Agency (CRA). Five provinces have combined it with their provincial tax into a single HST (harmonized sales tax). Québec has its own QST (Québec sales tax), administered by Revenu Québec, which also administers the GST in Québec. And British Columbia, Saskatchewan and Manitoba each have a separate PST (provincial sales tax).

For an online store, this means the tax you charge can depend on where your customer is, not only on where your business is. This guide explains the general picture so you can talk to your accountant with the right questions. It is not tax advice: for your situation, refer to the CRA, Revenu Québec, the relevant provincial authority or an accountant.

Sales tax rates by province

Here are the general combined rates published by the CRA. Some products are zero-rated or exempt (basic groceries, for example), and rates can change: always check the official sources before setting up your store.

In Québec, the QST is calculated on the price before tax, not on the price including GST, which is why the combined rate is 14.975%.

When you have to register

Most businesses must register for the GST/HST once their taxable sales exceed the small supplier threshold, which is $30,000 over four consecutive calendar quarters. Below that threshold, registration is optional, and some businesses register voluntarily so they can claim back the tax they pay on their expenses. The QST has a similar small supplier rule, managed by Revenu Québec.

Provincial sales taxes in British Columbia, Saskatchewan and Manitoba have their own registration rules, including for businesses located outside the province that sell to customers there. Businesses outside Canada selling digital products or services to Canadian consumers may also have to register under specific rules for the digital economy, at the federal level and in Québec.

Thresholds and rules evolve. Check the CRA, Revenu Québec and the relevant provincial websites, or ask your accountant, before you start selling outside your province.

Which rate to charge on an online sale

Canadian place-of-supply rules decide which province's tax applies to a sale. As a general principle, for physical goods shipped to a customer, the rate is usually that of the province where the goods are delivered. For services and digital products, the rules look at other factors, such as the customer's address.

In practice, an online store based in Montréal that ships a parcel to Toronto generally charges the Ontario HST rather than the Québec taxes, and a parcel shipped to Calgary generally carries only the GST. PST in the western provinces adds another layer, depending on your registrations. The details matter, so have your configuration validated by an accountant.

The right tax depends on what you sell, where you are registered and where your customer is. Configure your store from those three facts, not from your own province's rate.

Checklist: setting up taxes in your online store

• Collect the shipping or billing address before calculating tax, so the right province's rate is applied.
• Configure tax rules by province in your store or payment tool, and keep them up to date when rates change.
• Classify your products: some are zero-rated or exempt; do not apply one rate to everything blindly.
• Show taxes as separate lines at checkout and on invoices: GST, HST, QST or PST.
• Print your registration numbers on invoices and receipts where required.
• Decide how shipping is taxed with your accountant, and configure it accordingly.
• Keep records of every sale, with the province, the tax charged and the documents.
• Test the checkout with addresses in several provinces before launching.

Payment and e-commerce tools can calculate taxes automatically, but they apply the rules you configure. The responsibility for the settings stays with your business, so keep a written note of each choice.

Common mistakes when an online store opens

• Charging your own province's rate to every customer, wherever the parcel is delivered.
• Forgetting to register once sales outside your province grow, especially in provinces with a separate PST.
• Prices that include tax on some pages and not on others, which confuses customers and complicates accounting.
• Invoices without a separate tax breakdown or without your registration numbers.
• No record of the delivery province for each order, which makes tax returns and audits harder.
• Never retesting the checkout after a rate change or a new shipping option.

Most of these mistakes are easy to avoid if the tax configuration is reviewed with your accountant before launch, then checked once a year or whenever you start selling somewhere new.

Other rules for selling online from Québec

Taxes are not the only rule to plan for. If your store sells to customers in Québec, the website, checkout and confirmation emails must be available in French: see our Bill 96 guide. Every order also involves personal information (name, address, email, sometimes phone), which falls under Québec's Law 25: see our Law 25 guide.

Online payments are typically handled by a provider such as Stripe, which charges a fee on each transaction. Include those fees, and the cost of taxes you collect but cannot pass on, in your pricing.

How we build online stores

We design and build custom online stores and catalogues, with payments handled by Stripe and a design built for the phone first. Tax settings are configured with you, based on the rules your accountant confirms. Learn more on our e-commerce page, check our budget ranges in the website cost guide, or contact us to discuss your store (page in French; we reply in English).