GST, HST, PST, and QST: the four taxes you can run into
Canada layers a federal tax and, in most provinces, a provincial tax on top of taxable sales. The GST (Goods and Services Tax) is the 5 percent federal tax charged everywhere. In the participating provinces it is folded together with the provincial portion into a single HST (Harmonized Sales Tax) of 13 to 15 percent, so you charge one line instead of two. In British Columbia, Manitoba, and Saskatchewan a separate PST (Provincial Sales Tax) sits on top of the GST, and in Quebec the QST plays the same role at 9.975 percent.
For an online seller, the practical consequence is that the total tax on the same 100 dollar order ranges from 5 percent in Alberta to 15 percent in the Atlantic HST provinces, depending on where your customer is. If you want to see the split for any province before reading further, the Canadian sales tax calculator breaks down every component for all thirteen provinces and territories.
The small-supplier threshold: when you have to register
You are not required to charge GST/HST from your first dollar. Canada exempts a small supplier, generally a business whose taxable revenues are 30,000 dollars or less over four consecutive calendar quarters.[1] Cross that threshold and you must register for a GST/HST account, start charging, and remit what you collect. Many sellers register voluntarily before they hit the limit, because registration is what lets them claim back the GST/HST they pay on their own expenses.
PST and QST have their own separate registration rules administered by each province, so a seller shipping into British Columbia, Manitoba, Saskatchewan, or Quebec may need to register provincially as well as federally. Quebec is the notable case: Revenu Quebec[2] administers both the GST and the QST in the province, so Quebec sellers often file a combined return.
Place of supply: which province's rate applies
This is the rule online sellers get wrong most often. You do not charge the rate of the province your business sits in. You charge the rate of the province where the customer receives the goods or service, under the place-of-supply rules.[3] For physical goods that usually means the shipping address. An Ontario store shipping a parcel to Halifax charges Nova Scotia's 14 percent, not Ontario's 13 percent.
That is why a Canadian ecommerce checkout has to resolve tax per order, from the destination address, rather than apply one flat rate. We keep per-province landing pages for the highest-volume destinations, including the Ontario HST calculator, the Quebec sales tax calculator, and the BC PST calculator, each preset to that province so you can sanity-check a number in one click.
Collecting, claiming input tax credits, and remitting
Once registered, the tax you collect is not revenue. You hold it and remit it on your filing schedule. Against that you net input tax credits (ITCs): the GST/HST you paid on business purchases. The difference is what you send to the Canada Revenue Agency. This is where harmonized and non-harmonized provinces diverge in a way that trips up bookkeeping: GST and HST paid on inputs are generally recoverable as ITCs, but PST paid in British Columbia, Manitoba, or Saskatchewan usually is not, so it becomes a real cost rather than a wash.
For sellers active across several provinces, the reconciliation is the hard part: separating recoverable from non-recoverable tax, filing the combined federal and Quebec return correctly, and making sure the rate charged at checkout matches what the return expects. The PST vs QST guide covers the non-harmonized provinces in more detail.
Getting it right in Odoo
Odoo ships the Canadian localization with GST, HST, PST, and QST taxes already defined per province. The piece that makes online selling work is fiscal positions: rules that swap in the correct tax automatically based on the customer's address, so a sale delivered into Quebec books GST plus QST while the same product shipped to Alberta books only GST. Set that up once and your checkout, invoices, and tax returns stay consistent without anyone hand-keying a rate.
Where teams stumble is the QST and combined federal-Quebec filing, interprovincial sales, and account mapping for input tax credits. That is exactly the configuration we set up and validate for Canadian businesses. If you would rather hand it to someone who has done it before, book a free audit.
References
- Canada Revenue Agency, When to register for and start charging the GST/HST. The small-supplier threshold and registration rules. canada.ca/.../when-register-charge
- Revenu Quebec, GST/HST and QST. Basic rules for applying the GST/HST and QST in Quebec. revenuquebec.ca/.../gsthst-and-qst
- Canada Revenue Agency, charge and collect the tax: which rate to charge. The place-of-supply rules that decide which province's rate applies. canada.ca/.../charge-collect-which-rate