Place of supply

Why it matters

The CRA states that the rate to charge depends on the place of supply and the type of supply. Zero-rated supplies, such as basic groceries, are taxed at 0% throughout Canada. For other taxable supplies, a non-participating province means 5% GST, Ontario means 13% HST, Nova Scotia means 14% HST on or after April 1, 2025, and the other participating provinces mean 15% HST.

Provincial sales tax, where it applies, is separate and is not part of the GST calculation base.

Goods, services and intangible property

For goods, the place of supply is generally where the goods are delivered, or the province they are mailed, couriered or shipped to. A store in British Columbia delivering a mattress to Toronto charges 13% HST, because the place of supply is Ontario.

For most services, the general rule looks to the province of the recipient’s address that the supplier obtains in the normal course of business. A Quebec firm designing a website for an Ontario company charges at the Ontario rate. Personal services, services tied to real property or goods, and many other services have their own rules.

Intangible property, such as software licences, is generally tied to where the rights can be used, with further rules for particular situations. Real property is generally tied to its location.

A short illustration

A Hamilton consultant bills an advisory service to a business whose billing address is in a non-participating province. Under the general service rule, the recipient’s address points to that province, so GST at 5% may apply rather than 13% HST. This is illustrative, because address evidence and any special rule can change the answer.

What to keep and ask

Record the delivery address, the recipient’s business address, the contract terms and where work is performed. Set tax codes by province in your invoicing software, then review sales outside Ontario before filing. Ask your accountant about cross-border sales, bundled supplies and customers with several addresses.