If you’ve read our previous article on the Quick Method of Accounting for GST/HST, you know that understanding how your business remits HST and claims input tax credits is key to staying compliant. Another common challenge for Canadian businesses is determining which tax rate to charge when selling goods or services across provincial lines. If you have ever asked, “Do I charge the rate based on where my business is located, or where my customer is?” — you are not alone. The answer lies in the place of supply rules, which determine the applicable GST/HST rate based on what you are selling and where your customer is located. Understanding these rules is essential for charging the correct tax, staying compliant, and avoiding penalties.
The place of supply refers to the province or territory in which a supply (e.g., sale of goods or services) is considered to be made for GST/HST purposes. This is important because GST/HST rates vary by province, and the rate you charge depends on the location of the supply — not necessarily where your business is located.
The place of supply rules are used to determine the applicable GST/HST rate, which could be 0% (zero-rated), 5% (GST only), or 13%–15% (HST), depending on the customer’s location.
Charging the incorrect rate can result in errors on invoices, miscalculated tax remittances, and potential interest or penalties from the CRA.
At a high level, the place of supply is determined by:
In most cases, the GST/HST rate you charge will match the rate in your customer’s province, not your own — though there are exceptions based on the nature of the supply.
When you sell goods, the place of supply is generally the province where ownership or possession is transferred to the customer.
Examples:
The key factor is where the customer takes delivery of the goods.
For most services, the place of supply is where the customer is located, based on their business address or residential address (depending on the type of client).
Examples:
There are special rules for certain types of services, such as telecommunications, transportation, and services related to real property. Because these rules can be complex and vary depending on the specifics of the service and location, it’s a good idea to consult your accountant or tax professional if your business operates in one of these industries.
Intangible personal property includes items such as:
The place of supply for intangible property generally follows where the customer resides or intends to use the property. For instance, if you sell an online course to a customer living in British Columbia, you make the supply in BC, and you would charge 5% GST.
For real property (land, buildings, leasehold interests), the place of supply is always the location of the property. For instance, if you are renting out a commercial property located in Ontario, you make the supply in Ontario, and you must charge 13% HST—regardless of where the landlord or tenant resides.
Once you have determined the place of supply, you can apply the correct GST/HST rate. Below is a reference of current rates by province and territory (Please Note: GST/HST rates are current as of [October 2025] and may change. Always confirm rates with the CRA or your tax professional before applying them):
| Province/Territory | GST/HST Rate |
| Alberta | 5% (GST only) |
| British Columbia | 5% (GST only) * (plus PST, separately administered) |
| Manitoba | 5% (GST only) * (plus RST, separately administered) |
| Saskatchewan | 5% (GST only) * (plus PST, separately administered) |
| Ontario | 13% (HST) |
| New Brunswick | 15% (HST) |
| Nova Scotia | 15% (HST) |
| Prince Edward Island | 15% (HST) |
| Newfoundland & Labrador | 15% (HST) |
| Quebec | 5% (GST only) * (plus QST, separately administered) |
| Territories (YT, NT, NU) | 5% (GST only) |
Some provinces administer their own provincial sales taxes in addition to GST/HST:
When doing business in these provinces, be sure to account for their separate provincial sales taxes in addition to GST/HST. Stay tuned for our next article in the series, where we will explore provincial sales tax rules and how they interact with GST/HST.
Your business’s invoicing and accounting systems must be set up to:
Charging the incorrect rate of GST/HST can result in:
In some cases, clients may not be able to claim input tax credits if the tax rate or province is incorrect on your invoice. This could affect your reputation and credibility as a supplier. Ensuring proper application of place of supply rules is not just a compliance issue—it is also a sign of professionalism and sound business practice.
Understanding place of supply rules is essential for any business selling across provincial lines in Canada. These rules help ensure you are charging the correct GST/HST rate based on what you are selling and where your customer is located.
While the rules may appear complex at first, a consistent and informed approach—along with proper accounting support—can help you remain compliant and avoid costly errors.
At GBA LLP, we assist clients in applying place of supply rules correctly, setting up their invoicing and systems for multi-jurisdictional sales, and assessing whether they need to register for provincial sales taxes in provinces that administer their own (Quebec, Manitoba, Saskatchewan, and British Columbia). If you are unsure about how these rules apply to your business, our team is here to help.
Schedule a call today with one of our team members to discuss your accounting or tax needs – For More Details, Click Here.
This blog is not meant to provide specific advice or opinions regarding the topic(s) discussed above. Should you have a question about your specific situation, please discuss it with your GBA advisor.
GBA LLP is a full-service accounting firm in the Greater Toronto Area, but we primarily service all of Ontario as well as the rest of Canada virtually, except Quebec. Our team of over 30 provides audits and reviews of financial statements, compilations of financial information, and corporate tax returns. We provide specialized corporate tax and succession planning for small and medium businesses, in addition to general advisory services.
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