Understanding Canada GST, HST, PST and QST

If you run a business in Canada or plan to sell to Canadian customers, it is important to understand the country’s complex sales tax system, especially PST (Provincial Sales Tax) and QST (Quebec Sales Tax). While many are familiar with the federal GST/HST, provincial sales taxes add another layer of compliance that businesses can’t afford to ignore. Unlike some countries with a single national sales tax, Canada uses a combination of federal and provincial taxes.

There is break down the four main types of sales tax in Canada:

• GST (Goods and Services Tax)
• HST (Harmonized Sales Tax)
• PST (Provincial Sales Tax)
• QST (Quebec Sales Tax)

What is GST (Goods and Services Tax)?

GST is a federal tax that applies to most goods and services sold in Canada. Most businesses in Canada must register for GST if their taxable revenues exceed $30,000 annually. Once registered, you will charge GST on your invoices and file regular returns to remit the tax to the CRA.

• Rate: 5%
• Applies Across: All provinces and territories
• Collected By: The Canada Revenue Agency (CRA)

What is HST (Harmonized Sales Tax)?

HST is a combination of the federal GST and a provincial sales tax, merged into a single tax in some provinces. It simplifies administration by having one tax and one remittance.

HST Provinces and Rates:

• Collected By: Canada Revenue Agency (CRA)
• You only need to file one return for GST/HST.

Businesses operating or selling in HST provinces charge the full HST rate and remit it to the CRA.

What is PST?

PST (Provincial Sales Tax) is a retail sales tax charged by certain provinces in Canada. It is separate from the federal Goods and Services Tax (GST) and is applied to the sale of taxable goods and services within specific provinces.

Provinces that charge PST:

• British Columbia (BC) – 7%
• Saskatchewan (SK) – 6%
• Manitoba (MB) – 7%

Some provinces (like Ontario and Nova Scotia) use HST (Harmonized Sales Tax), which combines GST and PST into a single tax. In this post, we will focus on the provinces that charge PST separately.

What is QST?

QST (Quebec Sales Tax) is Quebec’s own provincial tax, administered by Revenue Québec. It is charged at a rate of 9.975% and is applied in addition to the 5% GST on most goods and services sold in Quebec.

Unlike other provinces, Quebec has its own tax authority and handles both GST and QST collection for businesses operating within the province.

Do You Need to Register for Sales Tax in Canada?

You may need to register for one or more types of sales tax if:

• You have a physical presence in the province (office, warehouse, employees).
• You make online sales to customers in Canada and exceed registration thresholds.
• You sell taxable goods or services regularly.

Even non-resident businesses (e.g. from the U.S. or Europe) may be required to register for GST/HST or QST if they sell to Canadian customers.

Who Needs to Register for PST and QST?

PST Registration:

You must register for PST in a province if:

• You are located in the province and sell taxable goods or services.
• You lease goods, or provide software or telecommunication services.
• You sell into the province (e.g. online sales) and meet the province’s threshold for out-of-province sellers.

QST Registration:

You must register for QST if:

• You are based in Quebec and make taxable sales.
• You are a non-resident of Quebec but sell goods or digital services to Quebec consumers (under the specified registration system).

Even non-Canadian businesses may need to register for QST if they sell digital products (like software or streaming services) to customers in Quebec.

How to File PST and QST Returns?

Once registered, you must file returns and remit the tax collected on a regular basis—monthly, quarterly, or annually, depending on your revenue and the provincial rules.

Filing PST:

Each PST province has its own online portal for filing:

• BC: eTaxBC
• Saskatchewan: PST Online Services
• Manitoba: TAXcess

You will report:

• Your total taxable sales
• The PST you collected
• Any exemptions or credits

Then, you remit the amount due to the respective provincial tax authority.

Filing QST:

If registered for QST, you must file with Revenu Québec. Filing can be done through their online portal (My Account for businesses). Your return must include:

• GST and QST collected
• Input tax credits (ITCs) and QST rebates, if applicable

Who Do You Pay PST To?

You pay PST to the province where the sale occurred or where your customer is located (for remote sellers). Each province manages its own PST, so you will remit the collected tax to that province’s finance department.

For example:

• Collected PST in British Columbia? Pay it to the BC Ministry of Finance.
• Collected PST in Manitoba? Remit to the Manitoba Finance Department.
• Collected QST? Pay it to Revenu Québec.

Key Takeaways

• PST and QST are provincial taxes separate from the federal GST.
• You may be required to register even if your business is outside the province.
• Filing and payment are handled directly with each province (or Revenu Québec for QST).
• Regular compliance is essential to avoid interest and penalties.

Need Help with Registration or Filing?

Navigating provincial tax laws can be complex, especially if you sell across multiple provinces or online. It is always a good idea to consult with a Canadian tax advisor or accountant like as FZCO Accountants Limited to ensure you’re meeting your obligations.