Canada Digital Sales Tax #1: Goods and Services Tax (GST)
Canada’s GST (Goods and Services Tax) is a national or federal sales tax. Currently it is 5% of sales on a wide range of goods and services including digital products.
The following Canadian provinces and territories don’t currently charge provincial sales tax:
- Alberta
- Northwest Territories
- Nunavit
- Yukon
Thus, you only have to charge 5% GST on sales in these provinces and territories and only if you are registered or have reached the registration threshold (annual sales of $30,000 Canadian).
Canada Digital Sales Tax #2: Harmonized Sales Tax (HST)
Additionally, Canada has entered into agreements with some provinces to combine (or harmonize) the federal and provincial sales taxes. When that happens, it is referred to as the HST (Harmonized Sales Tax).
The following Canadian provinces charge HST:
- New Brunswick: 15%
- Newfoundland and Labrador: 15%
- Nova Scotia: 14%
- Ontario: 13%
- Prince Edward Island: 15%
Thus, you only have to charge the appropriate HST rate on sales in these provinces and territories if you are registered or have reached the registration threshold (annual sales of $30,000 Canadian).
Canada Digital Sales Tax #3: Provincial (Retail) Sales Taxes (PST/RST)
In addition to paying GST, the following provinces have their own sales taxes:
British Columbia
- 7%
- Registration threshold: $10,000 Canadian annual consumer sales
Manitoba
- 7%
- Registration threshold: $30,000 Canadian annual consumer sales
Quebec
- 9.975%
- Registration threshold: $30,000 Canadian annual consumer sales
Saskatchewan
- 6%
- Registration threshold: none
Canada Digital Sales Tax Compliance
Canada digital sales tax compliance is a very complicated, constantly changing specialty. This information is not legal, professional, or tax advice, nor is it guaranteed to be complete, accurate, and up-to-date. It is being provided simply to make you aware that, as a resident or non-resident of Canada, you may be subject to sales taxes on the sale of your own digital products to residents of Canada and its various provinces and territories. Please discuss this situation with your own professional advisors.
We highly recommend this shopping cart with its simple sales tax functionality. It can help you with your digital sales tax compliance worldwide.