Which Province's Tax Do You Charge? GST/HST Place-of-Supply Rules for Remote Sellers

Canada has one federal sales tax with several different rates, depending on the province. A coffee sold in Calgary carries 5% GST; the same coffee sold in Toronto carries 13% HST; in Halifax, 14%. For a bricks-and-mortar shop this never comes up — every sale happens in one place. But the moment you ship products across the country, serve clients in other provinces, or sell digital products online, you have to answer a question most owners get wrong: whose rate do I charge?

The answer comes from the GST/HST place-of-supply rules. They decide which province a sale is considered to be "made in," and therefore which rate applies. The default assumption — "I'm in Saskatchewan, so I charge 5% to everyone" — is exactly the trap.

Read on for how the rules work for goods, services, and digital sales, the rate table, the real cost of getting it wrong, and a Canadian example.

The rate follows the supply, and the supply usually follows the customer

The GST/HST is one tax, but in "participating provinces" it's blended with a provincial component to form the HST, at a higher combined rate. Whether you charge 5%, 13%, 14%, or 15% depends on the province in which the supply is made — and the place-of-supply rules tell you which province that is.

The crucial shift in thinking: for cross-province sales, the "supply" is generally made where your customer receives it, not where your business is located. Your own province's rate is irrelevant to a customer in another province. This is the single idea that fixes most mistakes.

Source: CRA — GST/HST and place-of-supply rules; New Harmonized Value-added Tax System Regulations, No. 2 (place-of-supply rules).

Physical products you ship

For a sale of goods that you ship or deliver, the place of supply is generally the province where the goods are delivered or made available to the customer — in practice, the destination you ship to. So a maker in Regina shipping a product to a buyer in:

• Calgary (Alberta) charges 5% (GST only),
• Toronto (Ontario) charges 13% (HST),
• Halifax (Nova Scotia) charges 14% (HST),
• Moncton (New Brunswick) charges 15% (HST).

One product, four different totals — determined entirely by where it lands, not where it left.

Services, software, and digital products

For most services, the place of supply is generally determined by the address of the recipient that you obtain in the ordinary course of business — typically the customer's home or business address. If you have one such address, you generally use it; the rules add tie-breakers when you have more than one or none.

For intangibles and digital products (downloadable software, online courses, e-books, digital subscriptions), the rules also generally point to the recipient's location, often using the customer's billing or home address. The practical upshot is the same as for goods: a remote, online business usually charges based on where each customer is, not where the seller is.

There are detailed special rules for particular kinds of services (real-property-related, transportation, telecommunications, personal services performed in person, and so on). The general principle is recipient-based, but if your business is in one of those special categories, confirm the specific rule.

Source: New Harmonized Value-added Tax System Regulations, No. 2; CRA — GST/HST and place-of-supply rules.

What you charge, by province (2026)

Note Nova Scotia: its HST dropped from 15% to 14% on April 1, 2025, a reminder that these rates do change and your system needs to keep up.

Source: CRA — Charge and collect the GST/HST (which rate to charge). Quebec QST is administered by Revenu Québec.

The under-collection trap

Charging the wrong rate breaks in two directions, and they're not symmetrical:

• Charge too little (your 5% on a sale to an HST province): you've still made a supply in that province, so you owe the full 13–15% on your return. The CRA gets its money regardless. The difference comes out of your pocket, because you generally can't reissue invoices and collect more from customers months later.
• Charge too much (your high rate on a sale to a GST-only province): now you've over-collected tax from customers. That's its own problem — you've effectively overcharged, and amounts collected as tax must be accounted for.

The under-collection side is the dangerous one. It's invisible on every individual invoice — the customer is happy, the sale looks complete — and it accumulates silently until a return or a review brings it to light.

The cross-Canada shop that charged one rate

Meet Bianca, who runs Northwind Goods, a home-and-kitchen brand she ships across the country from Regina, Saskatchewan. She registered for GST/HST when she crossed $30,000, set her store to add 5% to every order, and moved on. Saskatchewan is a GST-only province, so 5% felt right.

In a strong year she does $180,000 in sales. Roughly 40% of it ships to Ontario and the Atlantic provinces — HST territory. On those orders, Bianca should have been charging 13–15%, but she charged 5% across the board.

Here's the math that catches up with her. On about $72,000 of sales into HST provinces, she collected 5% (~$3,600). But the tax actually owing on those supplies — at an average blended rate around 13.5% — is closer to $9,700. The roughly $6,100 gap is hers to remit, whether or not she ever collected it.

She can't realistically email a year of customers asking for another 8–10%. So the gap becomes a cost of the sale — wiping out the margin on her best-selling region. None of it would have happened if her store had simply applied the destination province's rate at checkout.

What should have happened

• Configure the store/checkout to apply GST/HST by the customer's province (destination), not a single flat rate.
• Use the correct current rates: 5 / 13 / 14 / 15% depending on where the order ships.
• For services or digital products, base the rate on the recipient's address captured at checkout.
• Review rates periodically — they change (e.g., Nova Scotia's 2025 drop to 14%).

Is your tax set up by destination?

• Does your invoicing/checkout charge GST/HST based on where the customer is, not where you are?
• Are all four rate tiers (5 / 13 / 14 / 15%) configured for the right provinces?
• If you sell services or digital products, are you capturing a recipient address to determine the rate?
• Do you sell into Quebec (and need to handle QST), or fall under any special place-of-supply rule for your industry?
• Is there a process to update rates when a province changes them?

Getting place of supply right is mostly a setup problem — fix it once and it runs itself. It's the kind of thing a bookkeeper who knows the rules will catch before it becomes a remittance gap, and it's part of every CDL plan. You can estimate the cost in about a minute.

Your rate isn't your province's rate

If you sell beyond your own province, "what rate do I charge?" has one reliable answer: the rate where the supply is made — which, for goods you ship and most services and digital sales, follows the customer. Charge your home rate to everyone and you're not saving anyone money; you're quietly signing up to pay the difference yourself.

This article is for informational purposes only and does not constitute tax advice. GST/HST rates and place-of-supply rules are detailed, contain special cases by type of supply, and change over time. Consult a qualified professional or the Canada Revenue Agency before deciding how to charge tax on your sales.

Primary sources, linked so you can read and interpret them yourself. Legislative links open on the official Justice Laws website; agency links open on the Government of Canada website.

• New Harmonized Value-added Tax System Regulations, No. 2 (SOR/2010-151) — the place-of-supply rules, Justice Laws
• CRA — GST/HST and place-of-supply rules
• CRA — Charge and collect the GST/HST (which rate to charge)
• Related reading: The $30,000 Question (when you must register), Zero-Rated vs. Exempt, and BC PST Demystified for the provincial side.