Canada’s goods and services tax (GST) affects many sales in Canada. In 2025, Canada collected an estimated 52.5 billion Canadian dollars (CAD) in GST revenue, which makes up about 10% of the country’s total federal revenues. Implementing GST is an important part of running a business in Canada, and registration thresholds, cross-border sales, and the addition of provincial tax rates are just a few of the moving parts.

Below, we’ll discuss how the GST tax in Canada is applied by province, which sales are taxable, and when businesses need to register.

What’s in this article?

• What is the GST tax in Canada?
  
• What are the GST rates by province and territory?
  
• Which sales are subject to GST in Canada?
  
• Who needs to register for GST in Canada?
  
• How do GST registration, filing, and reporting work for Canadian businesses?
  
• What are common GST mistakes businesses make?
  
• How Stripe Tax can help
  

What is the GST tax in Canada?

The GST rate in Canada is 5%. It’s the federal rate, and it applies everywhere in the country. Some provinces and territories charge only the federal GST, while others add a separate provincial sales tax. And several provinces have folded their provincial taxes into the GST to create a single harmonized sales tax (HST).

GST essentially works as a type of value-added tax (VAT). Each business in the supply chain charges GST on its sales, then claims back the GST it paid on business expenses. That design prevents tax from adding up as a product moves from supplier to manufacturer to retailer.

What are the GST rates by province and territory?

While Canada applies one federal GST rate nationwide, the total tax charged to customers depends on how each province structures its sales tax.

Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island combine the 5% GST with a provincial component into a single tax. Rates range from 13%–15%, and businesses file and remit the full amount through the federal system.

British Columbia, Saskatchewan, and Manitoba charge the 5% GST alongside a stand-alone provincial sales tax. These taxes are administered separately, which often means separate registration and reporting obligations.

Quebec applies the 5% GST and its own Quebec sales tax, which operates similarly to VAT but is administered by the province. Businesses that sell in Quebec generally work with both federal and provincial tax authorities.

Alberta, Yukon, the Northwest Territories, and Nunavut don’t levy any other taxes beyond the 5% GST.

Which sales are subject to GST in Canada?

Businesses should assume a sale is taxable unless there’s a clear rule that says otherwise. Here’s the distinction between taxable, zero-rated, and exempt sales.

Taxable sales

Most goods and services sold in Canada fall into this category and are subject to GST or HST at the applicable rate. These include physical products, subscriptions, professional services, accommodations, food sold at restaurants, and short-term rentals. Downloads, streaming services, software-as-a-service (SaaS) products, mobile apps, and other digital product offerings are taxable when they’re sold to Canadian customers. Generally, the same GST rules apply whether delivery is physical or electronic.

Zero-rated supplies

Some sales are taxed at 0%, which means no GST is charged to the customer but the sale still counts as taxable for input tax credit purposes. Common examples include basic groceries, prescription drugs, certain medical devices, exports, and many international transportation services.

Exempt supplies

A narrower group of sales is fully exempt from GST. No tax is charged, and input tax credits cannot be claimed on related expenses. This category includes many financial services, long-term residential rent, many healthcare services, and core educational services.

Who needs to register for GST in Canada?

GST registration depends on how much you sell and where your customers are. Businesses that earn more than 30,000 CAD in revenue from taxable services or products during a rolling 12-month period, which is Canada’s small supplier threshold, are required to register for GST. Once you exceed that threshold, registration becomes mandatory and GST must be charged on taxable sales. Businesses below the 30,000 CAD threshold aren’t required to register or charge GST. Some companies choose to register voluntarily so they can recover GST paid on business expenses.

Foreign companies that sell goods or digital services such as software, subscriptions, and streaming services to Canadian customers typically need to register for GST once they exceed the threshold. Certain businesses must register even if their sales are below the threshold, including taxi, rideshare, and limousine operators, as well as some businesses that run events or sell admissions in Canada.

How do GST registration, filing, and reporting work for Canadian businesses?

While registering for GST is a relatively simple step, filing and reporting are ongoing responsibilities. Here’s what you’ll need to do.

Register with the CRA

A company registers for a GST account through the Canada Revenue Agency (CRA) online. Registration creates a GST number linked to the business’s federal business number.

Choose an effective date

Registration usually takes effect when a business exceeds the small supplier threshold or chooses to register voluntarily. GST shouldn’t be charged before that effective date unless the registration is backdated.

Charge and disclose tax

After registration, GST or HST must be charged on all taxable sales and clearly shown on invoices or receipts. The applicable rate depends on where the customer receives the good or service, not where the seller is located. A sale shipped or delivered into another province must use the destination province’s GST or HST rate.

File and remit GST

Registered businesses must file GST returns on a set schedule (e.g., monthly, quarterly, annually) based on revenue and reporting elections. Businesses that earn less than 1.5 million CAD per year are required to file annually but can voluntarily file quarterly or monthly if desired. Companies that earn between 1.5 million CAD and 6.0 million CAD are required to file quarterly but have the option to file monthly if desired. Businesses that earn more than 6.0 million CAD must file monthly. Each return reports the GST collected minus eligible input tax credits, with the net amount paid to or refunded by the government.

Account for multiprovince tax rates

GST registration covers federal GST and HST provinces, but it doesn’t replace certain provincial registrations where separate sales taxes apply. Businesses that operate nationally generally need to register separately for provincial sales taxes in Quebec, British Columbia, Saskatchewan, and Manitoba.

What are common GST mistakes businesses make?

Many GST problems come from small, repeated errors that compound as a business grows or expands into new markets. For example, applying tax based on where the business is located instead of where the customer receives the goods or services is a frequent mistake. This happens often in ecommerce, SaaS, and cross-province shipping. Some businesses collect GST correctly but fail to claim credits on expenses they’re entitled to recover. Over time, this erodes margins and distorts the true cost of operating in Canada.

Businesses often track annual revenue loosely and overlook the rolling 12-month test. If a company exceeds the 30,000 CAD threshold without registering, it might owe GST that was never charged to customers. And treating taxable sales as exempt or zero-rated (or vice versa) can lead to undercollection or lost input tax credits. Digital products, bundled offerings, and mixed-use services are common trouble spots.

Selling through marketplaces or a payment provider doesn’t automatically eliminate GST responsibility. Responsibility depends on who controls pricing, billing, and customer relationships, and that distinction is often misunderstood. GST obligations also change as a business adds new products, enters new provinces, or sells across borders. Businesses should review their compliance regularly.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. In addition, it automatically calculates and collects sales tax, VAT, and GST on both physical and digital goods and services—in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful application programming interface (API).

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: Let Stripe manage your global tax registrations and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.