Do I Charge GST or HST to Out-of-Province Customers?

If you sell to a customer in another province, you can't automatically charge your own province's GST/HST rate. The rate depends on where the sale is considered to take place under CRA's place-of-supply rules, and that can depend on what you're selling, not just who's buying it.

This applies once you're registered for GST/HST. If your taxable sales are still under $30,000 and you haven't registered, you aren't required to charge it yet. Our post on the $30,000 threshold explains when that changes, and the GST/HST quiz can help you check where you stand.

Place of Supply: Which Province's Rate Applies?

When a sale crosses provincial lines, the seller's location doesn't automatically decide the GST/HST rate. CRA's place-of-supply rules determine which province the sale is considered to take place in. CRA's place of supply overview explains how the rules are organized.

For physical goods, where the goods are delivered or made available to the customer is generally what matters. That's the general rule in CRA's provincial place-of-supply guidance for tangible personal property.

Services work differently. For many services, the general rule looks first at the customer's home or business address obtained in the normal course of business. Other rules can apply when there isn't an address to use or when the service falls into a specific category. That's why "just charge your own province's rate" isn't a safe default for interprovincial sales, and why goods and services can't be treated the same way.

This Doesn't Mean Filing in Every Province

Even though the rate charged can vary depending on the province where a supply is made, a GST/HST registrant still reports its GST/HST through its GST/HST return. It doesn't file a separate GST/HST return for every province where it has customers. The real complexity lives at the point of sale, charging the right rate in the first place, not in some multi-province filing nightmare.

Interprovincial Sales Don't Create Separate ITC Systems

A GST/HST registrant still claims eligible input tax credits through its GST/HST return. An input tax credit is the mechanism that lets a registered business recover eligible GST/HST it pays on purchases and expenses used in its taxable business activities. Buying something in another province doesn't, by itself, mean filing a separate provincial GST/HST return.

The Two Mistakes That Show Up Most Often

Two habits cause most of the trouble: charging your home-province rate on every sale, and defaulting to the bare 5% GST on every sale. Both are common. Depending on where the sale is considered to take place, either one can undercharge or overcharge, and either way it's a mismatch that eventually needs correcting.

Pickup Can Change the Answer

Physical goods make this easier to see. If a customer picks up the goods in one province rather than having them delivered to another, the pickup location can determine the GST/HST rate. A Vancouver business selling an item to an Ontario resident who picks it up in Vancouver would generally charge 5% GST for that sale, not Ontario's 13% HST. The customer's home address doesn't override where the goods were made available to them.

Why This Needs to Be Automated, Not Tracked by Hand

For a business selling to customers across several provinces regularly, working out the right rate for every sale by hand gets error-prone fast. An invoicing or e-commerce platform set up to apply the correct rate based on the sale's place of supply takes most of that risk off the table.

The catch is that the software only applies what you've told it. The RSB Guide covers setting up your sales tax in the first place, and Margot (bottom right of this page, free to try, no sign-up) can help you check the tax settings in QuickBooks Online, Xero or whichever program you use.

The bigger provincial patchwork this sits inside, GST-only, HST, GST-plus-PST and Quebec's QST, gets the full treatment in our guide to Canada's sales tax system.

FAQ

Does the place-of-supply rule work the same for services as it does for physical goods?
No. Physical goods generally look to where the goods are delivered or made available. Services have their own place-of-supply rules, generally based on the customer's address on file rather than a delivery location. Don't apply the goods rule to a service sale. Confirm the specific test for what's being sold.

What if a customer picks up goods in person from the seller's own province?
Covered above. Pickup location can override the customer's home address for goods. If they take possession in the seller's province, that province's rate generally applies.

Does selling to a customer outside Canada follow the same rules?
No. Exports generally fall under a different set of rules entirely and are often zero-rated, rather than under the interprovincial place-of-supply framework that governs sales within Canada. Our post on zero-rated vs. tax-exempt GST/HST explains what zero-rated means.

If the wrong provincial rate got charged on past sales, does it need fixing?
It needs attention. If too little GST/HST was charged, the business may still be responsible for the amount it should have collected. If too much was charged, the business can generally refund or credit the excess to the customer and make the corresponding GST/HST adjustment. If excess GST/HST was collected and isn't refunded or credited, it generally still has to be accounted for in the business's GST/HST reporting. Don't leave a wrong rate sitting there and assume it will sort itself out.

Follow the system. File with confidence.