Indirect taxes come in many different forms. In the US, there’s sales tax. Across Europe and many other countries, there’s value-added tax (VAT). Businesses that make sales in Canada collect and remit goods and services tax (GST).

Below is a guide on collecting GST in Canada, including the difference between GST and harmonised sales tax (HST), how to calculate and collect GST, and how to file and remit it.

What's in this article?

• What is the difference between GST and HST?
  
• Who needs to collect GST/HST in Canada?
  
• How to register for a GST/HST account
  
• How to calculate and collect the correct GST and HST rates
  
• How to file and remit GST/HST in Canada
  
• How Stripe Tax can help
  

What is the difference between GST and HST?

The difference between GST and HST is that GST is a single rate applied across the entire country while HST is the combination of GST and local sales taxes in certain provinces. Many provinces have created their own provincial sales taxes in addition to GST. Five of them – Newfoundland and Labrador, New Brunswick, Nova Scotia, Ontario, and Prince Edward Island – have combined their provincial sales taxes with GST to create HST, which operates similarly to GST.

Who needs to collect GST/HST in Canada?

Any business that sells taxable goods or services in Canada must collect GST or HST once it exceeds the small supplier threshold, with specific rules applying to non-resident entities. These are the factors that create the tax obligation:

• Taxable supplies: The business provides taxable (including zero-rated) supplies in Canada in the course of conducting business activity in Canada and isn’t a small supplier.

• Admission sales: It sells taxable admission tickets for a place of amusement, seminar, activity, or event held in Canada, regardless of small supplier status.

• Conventions: It hosts a convention in Canada where more than 25% of delegates are Canadian residents, regardless of small supplier status.

• Publication sales: The business isn’t a small supplier and it solicits sales or sells books, newspapers, magazines, periodicals, or similar printed publications delivered to recipients in Canada.

A business qualifies as a small supplier if its worldwide taxable supplies each quarter are CA$30,000 or less during the last four consecutive calendar quarters. For example, an e-commerce store that generates CA$8,000 in monthly sales exceeds the threshold in its fourth month of operation. Once its sales exceed this limit, it loses small supplier status and must register for a GST/HST account.

Under digital economy rules in effect since July 2021, non-resident businesses that sell taxable digital products or services to Canadian customers and unregistered Canadian entities must register if their sales exceed CA$30,000 over any 12-month period. Eligible non-resident sellers can use a simplified GST/HST registration procedure. A business that’s eligible for the simplified regime might also voluntarily apply for standard GST/HST registration if it meets certain criteria, allowing it to claim input tax credits.

Businesses might not meet the tax registration threshold at the country level but could still need to register to collect provincial taxes in Manitoba, Saskatchewan, Quebec, and British Columbia.

How to register for a GST/HST account

You can register under the simplified GST/HST online. Here’s the process:

• Choose your account type: Decide between the simplified or standard (normal) regime. The simplified regime is designed for non-resident businesses that sell cross-border digital products, services, or platform-based short-term accommodation. The standard regime applies to Canadian resident businesses, non-residents who sell physical goods, and digital businesses that choose to register voluntarily to claim input tax credits.

• Determine your effective date of registration: Your effective date is typically the day your sales exceed the CA$30,000 threshold. Simplified registrants must apply on or before the day they exceed this threshold. Standard registrants have up to 30 days after exceeding the threshold to submit their applications.

• Confirm your fiscal year and revenue: Simplified accounts default to a calendar year-end of 31 December. A standard account might select a fiscal year that aligns with its corporate tax year. You’ll need to report your total annual taxable revenue in CAD. (New businesses can provide a reasonable estimate.)

• Gather business and ownership details: Prepare your legal name, operating name, business structure, physical and mailing addresses, contact details, and a clear description of your primary business activities. You must also supply identification details for each owner, partner, director, or corporate officer, including their title, contact information, and social insurance number (SIN) or temporary taxation number, if applicable.

• Submit the application and supporting documentation: Complete your application through the online portal of the Canada Revenue Agency (CRA) or submit Form RC1 for standard accounts. If the CRA requests supporting documentation (e.g., certificates of incorporation), submit these files within 10 working days.

• Post a security deposit, if required: Non-resident businesses that are registering under the standard regime without a permanent physical establishment in Canada must generally provide a security deposit (typically 50% of estimated net annual tax). Simplified registrants are exempt from this requirement.

• Authorise an account representative: If a third-party accountant, tax service provider, or software platform manages your filings, submit Form AUT-01 (or complete electronic authorisation in CRA’s portal) to grant administrative access.

How to calculate and collect the correct GST and HST rates

As of 2025, the nationwide GST rate is 5%, and the HST rate is 13% in Ontario, 14% in Nova Scotia, and 15% in New Brunswick, Newfoundland and Labrador, and Prince Edward Island.

To determine the correct rate, you must understand the place of supply, which is where you make your sale or lease. Sales of goods and services within Canada are generally taxable at the customer’s location. Sales of services provided to Canadian customers by sellers established in other countries are also typically taxable in Canada. While the Canadian government usually collects tax on sales to private persons, it doesn’t charge tax on sales to business customers who provide the seller with their tax identification numbers or a certificate of exemption.

You can find a GST/HST rate calculator on the Government of Canada’s website. Businesses that collect GST or HST are required to maintain records that show the tax collected. They’re also required to let customers know whether GST or HST is being applied to their purchases. Once you determine the correct tax rate, you can begin to charge and collect tax from your customers.

How to file and remit GST/HST in Canada

Once your business is registered, you must regularly report transactions and remit collected taxes to the CRA by following these core steps:

• File a return each reporting period: You must submit a return for every period, even if you had no taxable sales or tax to remit.

• Remit tax by the applicable deadline: Send any collected tax to the CRA on or before your designated payment due date.

• Check your filing due date: Deadlines vary by reporting frequency and appear at the top of your personalised return (Form GST34-2) or in your CRA online account.

• Confirm your reporting period: The CRA generally assigns an annual reporting period at registration, but you can elect to file quarterly or monthly.

• Follow official CRA filing instructions: Complete your return using the line-by-line guidance published on the Government of Canada’s website.

• Remit funds online: Submit your tax payments electronically through the CRA’s online portal.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. 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 helps you monitor your obligations and alerts you when you exceed a tax registration threshold based on your Stripe transactions. It can also register to collect tax on your behalf in the US, automate US filings in the Dashboard, and manage global filings through trusted partners. Stripe Tax automatically calculates and collects sales tax, value-added tax (VAT), and GST on:

• Digital goods and services in all US states and over 100 countries

• Physical goods in all US states and 42 countries

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: If you need to register for a sales tax in the US, let Stripe manage your tax registrations. You'll benefit from a simplified process that prefills application details – saving you time and simplifying compliance with local regulations. If you need help registering outside of the US, Stripe partners with Taxually to help you register with local tax authorities.

• 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 automates US filings in the Dashboard, powered by TaxJar. For global filings, 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. US tax filings can be automated in the Stripe Dashboard, powered by TaxJar.

Learn more about Stripe Tax or get started today.