📍 GST/HST Place‑of‑Supply Rules – Charge & Collect Sales Tax in Canada

To determine the GST/HST rate you must charge and collect on a sale or service in Canada, the Canada Revenue Agency (CRA) uses the place‑of‑supply rules. These rules define where a supply is considered to be made, and therefore which tax rate applies.

Official CRA resource: GST/HST and Place‑of‑Supply Rules – Canada.ca

📊 Basic GST/HST Rates in Canada

Depending on where the supply is made, the applicable tax rates are:

  • 🟢 5% GST – supplies made in non‑participating provinces
  • 🟡 13–15% HST – supplies made in participating provinces (e.g., Ontario, Nova Scotia, etc.)
  • ⚪ 0% (zero‑rated) – certain goods like basic groceries or exported supplies

The place of supply determines which of these rates applies, not necessarily where the seller or buyer is located.

📦 Goods – Place of Supply

For most tangible goods (products), the place of supply is the province where the goods are delivered, made available, or shipped to the customer’s address specified in the contract.

  • If goods are delivered to an address in Ontario, HST at the Ontario rate applies.
  • If goods are sent to Alberta, GST only applies.

When goods are sold but not delivered, place of supply is the province where delivery was supposed to happen under contract terms.

⚖️ Services – General Rules

For services, the CRA generally uses 3 place‑of‑supply rules.

  1. Recipient’s Canadian address – if obtained in the normal course of business.
  2. No Canadian address – if the service is performed mostly outside participating provinces, GST may apply.
  3. Tie or highest tax rate – if service is performed in multiple participating provinces, the rate with the highest HST may apply.

For example, web design services supplied by a business in Quebec to an Ontario client normally have place of supply in Ontario, so Ontario HST applies.

🏠 Real Property & Rentals

The place of supply for real property is the province where the property is physically located. For leases, the rule applies to each interval of possession or use.

  • Leasing an office in Newfoundland and Labrador → HST at NL rate
  • Selling land located in Saskatchewan → GST only.

🧰 Special Categories

Other specific place‑of‑supply rules apply for:

  • 📦 Property partly in multiple provinces
  • 🛠 Services related to tangible personal property (e.g., repair or maintenance)
  • 💻 Intangible personal property (software licences, IP rights)
  • 📱 Telecommunications and internet services
  • ✈ Supplies during passenger transportation.

These rules determine where and how GST/HST should be charged for complex or multi‑jurisdiction situations.

📍 Why Place‑of‑Supply Rules Matter

Incorrectly determining the place of supply can lead to charging the wrong tax rate, under‑remitting GST/HST, and potential assessments or audits by the CRA. Always verify the rules for your type of supply.

📌 Practical Example

A business in Alberta sells a sofa to a customer in Ontario. The contract specifies delivery to the Ontario address. The place of supply is Ontario, so Ontario HST must be charged.

Source: Canada Revenue Agency – GST/HST place‑of‑supply rules and tax rates for supplies in Canada.