Low-Cost Digital Platform Sales-Tax Compliance for Canadian Businesses

HST combines the 5% federal GST with a provincial component in five participating provinces. For 2026 the combined rates are 13% in Ontario, 15% in New Brunswick, Newfoundland and Labrador, and Prince Edward Island, and 14% in Nova Scotia since 1 April 2025. Elsewhere you charge the 5% GST alone, or GST plus a separate provincial tax. The rate follows the province of supply, not where your business sits.

GST is 5% in British Columbia for 2026, the same federal rate that applies everywhere in Canada. BC is not a harmonised province, so that 5% GST is charged alongside a separate 7% provincial sales tax, giving 12% on most taxable purchases. The two taxes have different exemption lists, which is why some items show 5% only. GST-registered businesses can recover the GST they pay on business inputs.

Claim everything you are entitled to and report it in the right place. Common items are RRSP contributions, union and professional dues, child care, moving expenses, medical expenses, tuition, digital news and donations, plus credits that transfer between spouses. Self-employed filers should claim every legitimate business expense on the T2125. Keep receipts for six years from the end of the tax year they relate to. A refund is your own overpaid tax coming back, not a bonus.

The business number is the single identifier the CRA uses for your business, with a separate programme account opened under it for each obligation: GST/HST, payroll deductions, corporate income tax, import and export. Register through Business Registration Online, by phone or by mail, or receive one automatically when you incorporate federally. You need it before you can remit payroll or file GST/HST. Provincial registration is separate in some provinces, notably Quebec, where Revenu Québec administers its own accounts.

GST/HST-exempt supplies include most residential rents, used residential housing, medical and dental services, child care, most educational courses, financial services and many charity or municipal services. No tax is charged, and the supplier cannot claim input tax credits on costs relating to them. Basic groceries, prescription drugs and exports are different: those are zero-rated, taxed at 0% with input tax credits still available. Check the CRA's GST/HST guide for the full lists.

Yes. A prior-year return can be filed at any time, and electronic filing stays open for several past years, so a 2024 return usually still goes through software rather than on paper. If a balance is owing, the late-filing penalty has already run to its twelve-month maximum and interest is still accumulating daily, so there is nothing to gain from waiting. If you cannot pay in full, file anyway and then arrange payment, because the penalty is tied to filing rather than paying.

HST in New Brunswick is 15% in 2026 - the 5% federal GST plus a 10% provincial component. New Brunswick raised its provincial component from 8% to 10% effective 1 July 2016, taking the combined rate from 13% to 15%; for an invoice that straddles that date, check the dated table on the CRA GST/HST rates and place-of-supply rules page. It applies to most goods and services supplied in the province, whoever the seller is.

Most financial services and most health care services are exempt, including services billed by physicians, dentists and registered nurses, so no GST/HST is charged and the supplier cannot claim input tax credits on the related costs. Legal services are taxable. Royalties are generally taxable when paid for the use of property in a commercial activity. Exempt is not the same as zero-rated, which is taxable at a rate of zero and keeps your credits, so check CRA's lists for your exact supply.

Your employer withholds income tax using the federal and provincial tables for your pay period and the claims on your TD1 forms, plus CPP or QPP and EI premiums until the annual maximums are reached. What comes off each payday is an estimate, so filing produces a refund or a balance owing. If too much is withheld all year, Form T1213 asks the CRA to authorise lower deductions; the CRA publishes no service standard for this, so allow several weeks and file before the tax year it applies to.

Yes. Alcohol is not a basic grocery, so beer, wine and spirits carry the full 13% HST in Ontario, whether bought at the LCBO, a beer retailer, a grocery store or a bar or restaurant. The LCBO shelf price already includes provincial mark-ups and levies, with HST shown on the receipt as included or added at the till. The temporary federal break on alcohol over the 2024 to 2025 holiday period has ended.

Usually no. Air travel that leaves the taxation area, which covers Canada, the continental United States and St. Pierre and Miquelon, is zero-rated, so a Toronto to London ticket carries no GST or HST. Flights to points inside that area, including most United States destinations, are taxable at the rate for the province you depart from. Departure taxes and airport charges imposed by other countries still appear on the fare and are not Canadian tax.

A taxable event is any transaction that creates income or a gain the CRA can tax: selling or transferring property, receiving salary, interest or dividends, withdrawing from an RRSP, exercising employee options, or a deemed disposition on emigration or death. For the 2025 and 2026 tax years, one-half of a capital gain is included in income. You cannot simply push income into next year: employment income is taxed when paid or receivable, and interest must be reported as it accrues even if you have not received it.