GST/HST rates and place-of-supply rules

GST/HST rate to charge customers

To know which GST/HST rate to charge, a supplier has to know what type of supply they are making and where the supply is being made. The place where a supply is made is referred to as the place of supply.

A zero-rated supply, such as a sale of basic groceries, has a 0% GST/HST rate, regardless of the place of supply in Canada.

Other taxable supplies have a:

  • 5% GST rate if the supply is made in a non-participating province
  • 13% HST rate if the supply is made in the participating province of Ontario
  • 15% HST rate if the supply is made in any other participating province

For example, if a store in British Columbia makes a supply of a good such as a mattress to their customer in Ontario and delivers it to the customer in Ontario, the place of supply is Ontario and the supplier charges 13% HST on the sale.

To find out if a supply is made outside Canada, see GST/HST Memorandum 3.3, Place of Supply.

Place-of-supply rules

These place-of-supply rules determine where a sale, lease or other taxable supply is made.

Goods and other tangible personal property

For place-of-supply rules:

  • A floating home is tangible personal property, not real property.
  • A mobile home that is not affixed to land is tangible personal property, not real property.

For the topic of "Goods and other tangible personal property", we use the word goods to refer to all tangible personal property.

For the purposes of the GST/HST, "lease interval" means a period that is the whole or a part of the period during which possession or use of the property is provided under a lease, licence or similar arrangement.

Sale of goods – other than sales of specified motor vehicles 

If the supplier:

  • delivers the goods (or makes them available) to the recipient, the place of supply is the province in which the goods are delivered
  • mails the goods, or sends them by courier, the place of supply is the province to which the goods are sent
  • ships the goods to a destination specified in the contract for its carriage, the place of supply is the province to which the goods are shipped
  • transfers possession of the goods to a common carrier or consignee that the supplier retained on behalf of the recipient to ship the goods to a destination specified in the contract for its carriage, the place of supply is the province to which the goods are shipped
Examples – Sale of goods – other than sales of specified motor vehicles

Example 1

A store in Ontario agrees to sell goods to a purchaser in Prince Edward Island. Based on the terms of delivery in the agreement for the sale of the goods, legal delivery of the goods to the purchaser occurs in Prince Edward Island. The place of supply is Prince Edward Island (a participating province) and the HST will apply at the Prince Edward Island rate.

Example 2

A store in Alberta agrees to sell goods to a purchaser in Ontario. Based on the terms of delivery in the agreement for the sale of the goods, legal delivery of the goods to the purchaser occurs in Alberta. However, the supplier agrees to have the goods shipped to the purchaser in Ontario. Although legal delivery of the goods to the purchaser occurs in Alberta, delivery of the goods to the purchaser is considered to occur in Ontario because the supplier ships the goods to an address in Ontario. The place of supply is Ontario (a participating province) and the HST will apply at the Ontario rate.

When goods are supposed to be delivered but are not

Sometimes goods are sold and there’s an agreement to deliver them to an address but the goods are never delivered. In that case, the place of supply is the province where the goods were supposed to be delivered under the terms of the agreement.

Sale of a specified motor vehicle

If certain conditions are met, the place of supply of the sale of a vehicle is the province where the vehicle is registered. For more information, see Find out how the GST/HST applies to a sale of a specified motor vehicle from a GST/HST registrant.

Leasing goods with the option to buy

A person may lease goods under an agreement that includes the option to later buy them. If the person exercises that option, the place of supply for that sale is the place the person starts to have possession of them as a buyer and not as a lessee. The same rules apply whether the original supply was by lease, licence or similar arrangement.

Railway rolling stock
Rentals and leases – 3 months or less

If goods are supplied by way of lease, licence or similar arrangement, their continuous possession or use is provided for 3 months or less, and the supplier: 

  • delivers the goods (or makes them available) to the recipient, the place of supply is the province in which the goods are delivered
  • mails the goods, or sends them by courier, the place of supply is the province to which the goods are sent
  • ships the goods to a destination specified in the contract for its carriage, the place of supply is the province to which the goods are shipped
  • transfers possession of the goods to a common carrier or consignee that the supplier retained on behalf of the recipient to ship the goods to a destination specified in the contract for its carriage, the place of supply is the province to which the goods are shipped
Example – Rentals and leases – 3 months or less

An individual rents a video camera from a store in Truro, Nova Scotia, to use while traveling across Canada. The rental agreement is for 6 weeks. The place of supply is Nova Scotia (a participating province) and the HST will apply on the rental price at the Nova Scotia rate.

Rentals and leases – other than specified motor vehicles – more than 3 months

For each lease interval, a recipient is considered to have received a separate supply of the goods for separate consideration if the goods are supplied by way of lease, licence or similar arrangement, and their continuous possession or use is provided for more than 3 months.

The supply for each lease interval is considered to be made on the earliest of: 

  • the first day of the lease interval
  • the day the lease payment for that interval becomes due
  • the day the lease payment for that interval is made 

For each lease interval, the place of supply is based on the ordinary location of the goods at the time of the supply. Their ordinary location is the place the supplier and the recipient agree on for that interval, even if the goods are actually located in a different place at that time. The ordinary location would change if the supplier and recipient agree on a different location. The ordinary location would be that new location.

Example – Rentals and leases – other than specified motor vehicles – more than 3 months

A national leasing company leases a photocopier to a consulting firm in New Brunswick for a four-year period. Under the lease agreement, monthly lease payments are required. At first, the photocopier is located at the firm's office in New Brunswick. At the end of the third monthly lease interval, the firm, with the agreement of the leasing company, moves the photocopier to their new office in Manitoba. The place of supply is New Brunswick (a participating province) during the first 3 lease intervals and Manitoba (a non-participating province) during the fourth lease interval, therefore the HST will apply at the New Brunswick rate for the first 3 lease intervals and the GST will apply for the fourth lease interval.

Rentals and leases – specified motor vehicles – more than 3 months

For specified motor vehicles, a recipient is considered to have received a separate supply for separate consideration for each lease interval if continuous possession or use is provided for more than 3 months.

The supply for each lease interval is considered to be made on the earliest of:

  • the first day of the lease interval
  • the day the lease payment for that interval becomes due
  • the day the lease payment for that interval is made

The place of supply is the province where the vehicle has to be registered for that lease interval.

Example – Rentals and leases – specified motor vehicles – more than 3 months

A car leasing company in Nova Scotia leases a vehicle to an individual according to a two-year lease requiring monthly lease payments. The lessee picks up the vehicle at the supplier's location in Nova Scotia and the vehicle is required to be registered in Nova Scotia throughout the lease. The place of supply of the vehicle for each separate lease interval is Nova Scotia (a participating province) and the HST will apply at the Nova Scotia rate to each lease payment since the car is required to be registered in Nova Scotia throughout the lease.

Real Property

For place-of-supply rules:

  • A floating home is tangible personal property, not real property.
  • A mobile home that is not affixed to land is tangible personal property, not real property.

For the purposes of the GST/HST, "lease interval" means a period that is the whole or a part of the period during which possession or use of the property is provided under a lease, licence or similar arrangement.

Sale of real property

The place of supply for a sale of real property is the province where the property is located.

Example – Sale of real property

A company based in New Brunswick sells one of its warehouses that is located in New Brunswick to a company in Saskatchewan. The place of supply is New Brunswick and the HST will apply at the New Brunswick rate.

Lease of real property

If real property is supplied by way of lease, licence or similar arrangement, for each lease interval, a recipient is considered to have received a separate supply of the real property for separate consideration.

The supply for each lease interval is considered to be made on the earliest of:

  • the first day of the lease interval
  • the day the lease payment for that interval becomes due
  • the day the lease payment for that interval is made

The place of supply for a lease of real property is the province where the property is located during the lease interval.

Example – Lease of real property

A company in Prince Edward Island leases a commercial office building located in Newfoundland and Labrador to a company in Ontario according to a ten-year lease requiring monthly payments. The place of supply of the commercial office building for each separate lease interval is Newfoundland and Labrador since the building is located in that province. The HST will apply at the Newfoundland and Labrador rate to each lease payment.

Sale or lease of real property located partly in a province

In some cases, real property is located in 2 different provinces, or one part of the real property is in Canada and the other part is outside Canada.

The supply of the part in one province is considered to be a separate supply than the part in the other province (or outside Canada). The amount of consideration paid for each part is considered to be the amount that is reasonably attributable to each part.

Example – Sale or lease of real property located partly in a province

A company in Quebec sells a commercial building to an Ontario company. The building is located in both Ontario and Quebec. The part of the real property in Ontario and the part in Quebec are each considered to be a separate sale of real property. The HST will apply at the Ontario rate to the amount of consideration paid that is reasonably attributable to the part located in Ontario (a participating province). The GST will apply to the amount of consideration paid that is reasonably attributable to the part located in Quebec (a non-participating province).

Services

For services, 1 of these 3 general rules usually determines the place of supply. If any of the other specific rules apply, these 3 general rules do not.

General rule 1 – Address in Canada obtained

The place of supply is the province of the recipient’s address if the supplier obtains that address in the normal course of business. If the supplier:  

  • obtains only one address that is a home or business address in Canada, the supplier uses that home or business address
  • obtains more than one such address, the supplier uses the home or business address most closely connected with the supply
  • does not obtain such an address, the supplier uses the address in Canada of the recipient that is most closely connected with the supply (this could happen if the supplier obtains the billing address of the recipient without knowing whether it is also their home or business address)
Example – General rule 1 – Address in Canada obtained

A supplier in Quebec agrees to design the website of a company in Ontario. The service is performed entirely in Quebec. The business address of the recipient obtained by the supplier is in Ontario. Since the business address of the recipient is in Ontario, the place of supply is Ontario (a participating province) and the HST will apply at the Ontario rate.

General rule 2 – No address in Canada obtained

Rule 2a – Canadian part not performed primarily in participating provinces

The place of supply is a non-participating province if the Canadian part of the service is not performed primarily (more than 50%) in participating provinces.

Rule 2b – Participating province of largest proportion

The place of supply is a participating province if the Canadian part of the service is performed primarily (more than 50%) in participating provinces and an equal or larger proportion of the Canadian part of the service is not performed in another participating province.

Rule 2c – Higher tax rate

If rule 2b does not determine the place of supply because the service is performed equally in 2 or more participating provinces, the place of supply will be the participating province with the highest HST rate of those provinces. If 2 or more of those provinces have the same highest tax rate, the place of supply is one of those provinces.

Examples – General rule 2 – No address in Canada obtained

Example 1 – Rule 2a – Canadian part not performed primarily in participating provinces

A business in Alberta specializes in website production and marketing services. Employees perform these services from the business address in Alberta. They receive and send all documents through email. They do not obtain an address for their clients.

Since the Canadian element of the service is not performed primarily in participating provinces, the place of supply will be that non-participating province (Alberta) and the GST will apply to the services.

Example 2 – Rule 2b – Participating province of largest proportion

A business in Nova Scotia specializes in providing online editing and translation services. Employees perform these services from the business address in Nova Scotia. They receive and send all documents through email. They do not obtain an address for their clients.

Since the Canadian element of the service is performed primarily in participating provinces, and the participating province where the largest proportion of that service is performed is Nova Scotia, the place of supply is Nova Scotia (a participating province) and the HST will apply at the Nova Scotia rate.

Personal services

The general rules do not apply to a personal service. For these services, the following place-of-supply rules apply.

Generally, a personal service is performed 90% or more in the presence of the individual, or the group of individuals, to whom it is rendered.

The place-of-supply rules for personal services do not apply to the supply of an advisory, consulting or professional service. These services are usually subject to the general place-of-supply rules for services, unless another specific rule applies to them.

Personal service rule 1 – Primarily in participating provinces

The place of supply is a participating province if the Canadian part of the personal service is performed primarily (more than 50%) in participating provinces, and an equal or larger proportion of the service is not performed in another participating province.

Personal service rule 2 – Not primarily in participating provinces

The place of supply is a non-participating province if the Canadian part of the personal service is not performed primarily (more than 50%) in participating provinces.

Personal service rule 3 – Higher tax rate

If the previous 2 rules do not determine the place of supply because the service is performed equally in 2 or more provinces, the place of supply is the participating province of those provinces with the highest HST rate. If 2 or more of those provinces have the same highest tax rate, the place of supply is one of those provinces.

Examples – Personal services

Example 1 – Personal service rule 1 – Primarily in participating provinces

An individual gets his hair cut at a salon in Fredericton, New Brunswick. The place of supply is New Brunswick (a participating province) and the HST will apply at the New Brunswick rate.

Example 2 – Personal service rule 2 – Not primarily in a participating provinces

An individual gets a pedicure at a spa in Regina, Saskatchewan. The place of supply is Saskatchewan (a non-participating province) and the GST will apply to the service.

Services in relation to tangible personal property (goods)

For place-of-supply rules:

  • a floating home is a good, not real property
  • a mobile home that is not affixed to land is a good, not real property

The following place-of-supply rules are generally based on whether the goods remain in the same province while the service is performed. For these rules, the supplier generally has to determine where the goods are located when the service starts to be performed and while the service is performed. If it's not possible for a supplier to make that determination, the general place-of-supply rules for services usually apply.

See the Repairing, maintaining, cleaning or altering goods, or producing photographic-related goods section on this page, under services, if the service being performed is the repair, maintenance, cleaning, adjusting or altering of tangible personal property. Also see that topic if the service is the production of a negative, transparency, photographic print or other photographic-related good.

Goods remaining in the same provinces while the service is performed

The place of supply of a service in relation to goods that are located in one or more provinces at the particular time when the Canadian part of the service begins to be performed and that at all times when the Canadian part of the service is performed, remain in the province in which they were located at the particular time, is a participating province if at the particular time the goods are located primarily (more than 50%) in participating provinces. The place of supply for the service will be the participating province where the largest proportion of the goods, which are located in the participating provinces, is located.

Example – Services in relation to goods – Goods remaining in the same provinces while the service is performed

You hire a repair person to fix a washing machine at your home in Cornwall, Ontario. The place of supply is Ontario (a participating province) and the HST will apply to the service at the Ontario rate.

If the largest proportions of the goods are located in 2 or more participating provinces, the place of supply is the participating province among those provinces where the HST rate is highest. If 2 or more of those provinces have the same highest tax rate, the place of supply is one of those provinces.

Example – Services in relation to goods – Goods remaining in the same 2 or more participating provinces while the service is performed

You hire a national company to provide appliance repair services for a flat fee, for appliances located in 3 provinces as follows:

  • 40% in Ontario
  • 40% in New Brunswick
  • 20% in Alberta  

The appliances are located primarily in participating provinces (80%) and the largest proportions of those appliances are located in Ontario and New Brunswick. Since the HST rate in New Brunswick is the highest, the place of supply is New Brunswick (a participating province) and the company will charge the HST at the New Brunswick rate.

The place of supply of a service in relation to goods that are located in one or more provinces at the particular time when the Canadian part of the service begins to be performed and that at all times when the Canadian part of the service is performed, remain in the province in which they were located at the particular time, is a non-participating province if at the particular time the goods are not located primarily (more than 50%) in participating provinces.

Goods not remaining in the same provinces while the service is performed

The place of supply of a service in relation to goods that are located in one or more provinces at the particular time when the Canadian part of the service begins to be performed and that at any time during the period when the Canadian part of the service is performed do not remain in the province in which they were located at the particular time, is a participating province if all of the following conditions are met:

  • The goods are located primarily (more than 50%) in participating provinces at any time the Canadian part of the service is performed.
  • The Canadian part of the service is performed primarily in participating provinces.
  • The largest proportion of the performance of the service, which is performed in one or more participating provinces, is performed in that province or those provinces.
Example – Services in relation to goods – Goods not remaining in the same provinces while the service is performed

You are a company and you hire another company to conduct tests on a vehicle. The service is performed as follows:

  • 60% in Ontario
  • 40% in Manitoba

The vehicle is located in Ontario when the Ontario part of the service is performed and in Manitoba when the Manitoba part of the service is performed. The vehicle is moved from Ontario to Manitoba after the Ontario part of the service is performed. The vehicle is located primarily in participating provinces when the Ontario part of the service is performed and the service as a whole is performed primarily in participating provinces, the largest proportion of which is performed in Ontario. The place of supply is Ontario (a participating province) and the HST will apply at the Ontario rate.

If the largest proportions of the service are performed in 2 or more participating provinces, the place of supply is the participating province among those provinces where the HST rate is highest. If 2 or more of those provinces have the same highest tax rate, the place of supply is one of those provinces.

The place of supply of a service in relation to goods that are located in one or more provinces at the particular time when the Canadian part of the service begins to be performed and that at any time during the period when the Canadian part of the service is performed do not remain in the province in which they were located at the particular time, is a non-participating province if either of the following conditions are met:

  • The goods are not located primarily (more than 50%) in participating provinces at all times when the service is performed.
  • The Canadian part of the service is not performed primarily in participating provinces.
Example – Services in relation to goods – Goods not remaining in the same provinces while the service is performed

You are a company and you hire another company to conduct tests on a vehicle. The service is performed as follows:

  • 60% in Manitoba
  • 40% in Ontario

The vehicle is located in Manitoba when the Manitoba part of the service is performed and in Ontario when the Ontario part of the service is performed. The vehicle is moved from Manitoba to Ontario after the Manitoba part of the service is performed. While the vehicle is located primarily in participating provinces when the Ontario part of the service is performed, the service as a whole is not performed primarily in participating provinces. The place of supply is Manitoba (a non-participating province) and the GST will apply to the service.

Services in relation to real property

The general place-of-supply rules for services will not apply to supplies of services in relation to real property. Instead, the "largest proportion" rule will usually determine the place of supply.

The place of supply is a participating province if the real property located in Canada to which the service relates is located primarily (more than 50%) in participating provinces. The place of supply is the participating province where the largest proportion of the real property is located.

The place of supply is a non-participating province if the real property located in Canada to which the service relates is not located primarily (more than 50%) in participating provinces.

To determine the proportion of the real property in each province, use its physical size (pursuant to its legal description), instead of its value or the number of properties.

Example – Services in relation to real property located in one province

You hire a Quebec company to paint your warehouse in Ontario. The place of supply is Ontario (a participating province) because the real property located in Canada to which the service relates is 100% in Ontario. The Quebec company will charge the HST at the Ontario rate on its supply of painting services.

Example – Services in relation to real property located in more than one province

You have a contract to supply window cleaning services for real property located in 2 provinces as follows:

•     25% in Nova Scotia
•     75% in Alberta

The real property is not located primarily in participating provinces. The place of supply is Alberta (a non-participating province). The GST will apply to your window cleaning services.

Example – Services in relation to real property located in 2 or more participating provinces

You have a contract to supply landscaping services for real property located in 3 provinces as follows:

•    40% in Alberta
•    35% in Prince Edward Island
•    25% in Ontario

Even though the highest single percentage of the real property is located in a non-participating province (Alberta), the combined percentages of the 2 participating provinces make the real property located primarily in participating provinces. Of those participating provinces, the largest proportion of the real property is located in Prince Edward Island. The place of supply is Prince Edward Island (a participating province) and the HST will apply at the Prince Edward Island rate.

If the "largest proportion" rule does not determine the place of supply because the largest proportions of the real property are located equally in 2 or more participating provinces, the place of supply is the participating province among those provinces with the highest HST rate. If 2 or more of those participating provinces have the same highest tax rate, the place of supply is one of those provinces.

Example – Services in relation to real property located equally in 2 or more participating provinces

You supply property management services in relation to real property located in 3 provinces as follows:

•    40% in New Brunswick
•    40% in Prince Edward Island
•    20% in Alberta

The real property is located primarily in participating provinces. There is no participating province with the largest proportion of the real property since the largest proportions in those provinces are located equally in New Brunswick and Prince Edward Island. Since New Brunswick and Prince Edward Island (both participating provinces) have the same HST rate, you will charge that rate for your property management services.

Services in relation to real property located both in Canada and outside Canada 

The place of supply is outside Canada if the real property is located outside Canada.

However, if the real property is both located in Canada and outside of Canada, the place of supply is:

•    in Canada for the proportion of the service that is located in Canada
•    outside Canada for the proportion of the service that is located outside Canada

As a result, only the supply of the proportion of the service that relates to real property located in Canada is subject to the GST/HST.

Specific rules for other services

The following services have specific place-of-supply rules.

Air navigation services

The place of supply for air navigation services (as defined in subsection 2(1) of the Civil Air Navigation Services Commercialization Act) is a province if the leg of the flight during which the services are performed originates in that province.

For this place-of-supply rule, leg means a part of a flight of an aircraft that begins where passengers embark or disembark the aircraft, where freight is loaded on (or unloaded from) the aircraft, or where the aircraft is stopped to allow for its servicing or refuelling, and that ends where it is next stopped for any of those purposes.

Example – Air navigation services

Air navigation services are provided to an air carrier for a flight from Toronto (Ontario) to Montreal (Quebec). The place of supply for the air navigation services for the Toronto–Montreal flight is Ontario (a participating province) because the leg of the flight for which the services are performed originates in Ontario. The HST will apply to the services at the Ontario rate.

Computer-related services and internet access

The place of supply for computer-related services and internet access depends on whether the supply is made to a single final recipient or multiple final recipients.

These rules override other place-of-supply rules that could otherwise apply to the supplies of computer-related services and internet access. For example, a supply of internet access is a supply of a telecommunication service. However, the place-of-supply rules explained in this "Computer-related services and internet access" section override the place-of-supply rules for telecommunication services (for the supply of internet access).

Single final recipient

If the supplier supplies a computer-related service or internet access to a single final recipient who acquires the supply under an agreement (with that supplier or another supplier), the place of supply is the province where the final recipient avails itself of the service or access at a single ordinary location, if either of the following conditions are met:

  • The supplier has sufficient information to determine that location.
  • It is the supplier's normal business practice to obtain sufficient information to determine that location.

In any other case where there is to be a single final recipient, the place of supply is the province of the mailing address of the recipient of the supply.

Examples – Computer-related services and internet access – Single final recipient

Example 1

A company in Quebec supplies computer and software technical support services by telephone and email to a company in Ontario. The technical support services are only available to employees who work at the company's business location in Ontario and call from that location. The place of supply for the computer-related service is Ontario (a participating province) because the service is to be used from a single ordinary location that is in Ontario and the supplier has sufficient information to determine that location. The HST will apply to the services at the Ontario rate.

Example 2

An internet service provider (ISP) based in Newfoundland and Labrador supplies internet access to clients in Newfoundland and Labrador and New Brunswick. The ISP enters into an agreement with a business client in St. John’s, Newfoundland and Labrador for the supply of internet access. Under that agreement, the ISP’s business client will access the internet from its single operation in St. John's. The place of supply is Newfoundland and Labrador (a participating province) because the recipient avails itself of the internet access at a single ordinary location in Newfoundland and Labrador and the supplier has sufficient information to determine that location. The HST will apply to the internet access service at the Newfoundland and Labrador rate.

Multiple final recipients

Computer-related services

If the following 3 conditions are met, the supplier uses the general place-of-supply rules for services as if the service were performed in each province in which, and to the same extent to which, the final recipients avail themselves of the service.

1. There are to be multiple final recipients of the service.
2. Each final recipient acquires the supply under an agreement (with either that supplier or another supplier).
3. In the case of each final recipient, there is a single location at which the final recipient avails itself of the service, and either the supplier has sufficient information to determine that location, or it is their normal business practice to obtain that information.

In any other case where there are to be multiple final recipients of the supply, the place of supply for the computer-related service would be the province of the mailing address of the recipient.

Internet access

If the following 3 conditions are met, the supplier uses the place-of-supply rules for intangible personal property as if the internet access were accessible in each province in which, and to the same extent to which, the final recipients avail themselves of the internet access.

1. There are to be multiple final recipients of the internet access.
2. Each final recipient acquires the supply under an agreement (with either that supplier or another supplier).
3. In the case of each final recipient, there is a single location at which the final recipient avails itself of the access, and either the supplier has sufficient information to determine that location, or it is their normal business practice to obtain that information.

In any other case where there are to be multiple final recipients of the supply, the place of supply for the internet access will be the province of the mailing address of the recipient.

Example – Computer-related services and internet access – Multiple final recipients

An internet service provider (ISP) based in Newfoundland and Labrador supplies internet access to clients in Newfoundland and Labrador and New Brunswick. The ISP supplies internet access to a medium-sized business client that provides online services. The internet access will be used by employees of the client who work from their homes in various provinces in Canada. The ISP and the client enter into an agreement for the supply of the internet access and the final copy of the agreement is mailed to the client's business address in New Brunswick. In this case, because there is no single ordinary location at which the final recipient avails itself of the internet access, the place of supply is New Brunswick (a participating province), the province of the mailing address of the recipient. The HST will apply to the service at the New Brunswick rate.

Customs brokerage services

A customs brokerage service means a service of arranging for the release of imported goods or of fulfilling, for the importation, any requirement under the Customs Act or the Customs Tariff to account for the goods, to report, to provide information or to remit any amount.

The place of supply for a customs brokerage service for imported commercial goods is the province where the goods are located at the time of their release.

However, the place of supply for a customs brokerage service for imported non-commercial goods is a participating province if the provincial part of the HST meets either of the following conditions:

  • It is imposed on the importation of the goods at the rate for that participating province.
  • It would be imposed if various provisions did not apply to relieve certain types of importations from the imposition of the provincial part of the HST.

Relieving provisions apply to:

  • imported goods accounted for as commercial goods, imported specified motor vehicles or imported mobile homes or floating homes that have been used or occupied in Canada by any individual
  • certain goods imported by or on behalf of persons who are resident in the Nova Scotia offshore area or the Newfoundland offshore area
  • imported goods that qualify as non-taxable importations from the imposition of the GST or federal part of the HST

In any other case, the place of supply for the customs brokerage service is a non-participating province.

The above rules do not apply to the supply of, or request for, any service related to:

  • an objection
  • an appeal
  • a re-determination
  • a re-appraisal
  • a review
  • a refund
  • an abatement
  • a remission
  • a drawback
Example – Customs brokerage services

A customs broker in Quebec arranges for the release in Ontario of imported non-commercial taxable goods for a client who is a consumer that is resident in Ontario. The goods are shipped to the home address of the consumer in Ontario. The place of supply for the customs brokerage service is Ontario (a participating province) because the Ontario provincial part of HST is imposed on the importation of the goods. The HST will apply to the service at the Ontario rate.

Freight transportation services

The place of supply for a freight transportation service is a province if the destination of the service is in that province. This rule does not apply to most supplies of mail services supplied by the Canada Post Corporation which are subject to the place-of-supply rules that are explained in the section dealing with postage and mail delivery services. For more information, see Find out how the GST/HST applies to freight transportation services.

Passenger transportation services

The place of supply for a passenger transportation service is a participating province if that service is provided as part of a continuous journey, a ticket or voucher is issued for the particular passenger transportation service provided first in that continuous journey, and either of the following conditions are met:

  • The ticket or voucher specifies the origin of the continuous journey, which is a place in the participating province, and the termination of, and all stopovers during, the continuous journey are in Canada.
  • The ticket or voucher does not specify the origin of the continuous journey, but the particular passenger transportation service cannot begin otherwise than in that participating province, and the termination of, and all stopovers during, the continuous journey are in Canada.

The place of supply for a passenger transportation service is also a participating province if that service is not part of the continuous journey, but it begins in that participating province and ends in Canada.

The place of supply for a passenger transportation service is a non-participating province if that service is provided as part of a continuous journey, a ticket or voucher is issued for the particular passenger transportation service provided first in that continuous journey, and any of the following conditions are met:

  • The ticket or voucher specifies the origin of the continuous journey, which is a place outside the participating provinces.
  • The ticket or voucher does not specify the origin of the continuous journey, but the particular passenger transportation service cannot begin in a participating province.
  • The termination of (or a stopover during) the continuous journey is outside Canada.

The place of supply for the passenger transportation service is also a non-participating province if that service is not part of a continuous journey, but it begins outside the participating provinces or ends outside Canada.

Example – Passenger transportation services

You buy a return ticket for a flight from Ottawa, Ontario to Montreal, Quebec. The ticket issued for the flight specifies Ottawa as the origin of the continuous journey. The place of supply for the passenger transportation service is Ontario (a participating province) because the ticket issued for the first passenger transportation service provided in the continuous journey specifies the origin of the continuous journey as being in Ontario and there is no termination or stopover outside Canada. The HST will apply to the passenger transportation service at the Ontario rate.

Supplies made during passenger transportation services

Supplies made during an international flight or international voyage

If a supply of tangible personal property or a service (other than a passenger transportation service) is made to an individual on board an aircraft on an international flight or a vessel on an international voyage and physical possession of the property is transferred to the individual (or the service is wholly performed) on board the aircraft or vessel, the place of supply is considered to be outside Canada and is therefore not subject to GST/HST.

Supplies made other than during an international flight or international voyage

If a supply of property or a service (other than a passenger transportation service) is made to an individual on board a conveyance in the course of supplying passenger transportation services and the property or service is delivered, performed, or made available on board the conveyance during any leg of a journey that begins in any province and ends in any province, the place of supply is the province where that leg of the journey begins.

Example – Supplies made during passenger transportation services

A passenger on a flight from Ottawa, Ontario to Vancouver, British Columbia buys a drink during the Ottawa-Calgary (Alberta) leg of the journey and then buys another drink during the Calgary-Vancouver (British Columbia) leg of the journey. Since the first drink is sold during the leg of the journey that begins in Ontario, the place of supply is Ontario (a participating province) and the HST will apply to that sale at the Ontario rate. Since the second drink is sold during the leg of the journey that begins in Alberta, the place of supply is Alberta (a non-participating province) and the GST will apply to that sale.

Services related to the supply of passenger transportation services

Baggage charges

The place of supply for the service of transporting an individual's baggage in connection with a passenger transportation service is, if made by the supplier of the passenger transportation service, the same province in which the supply of the passenger transportation service is made.

Example – Services related to the supply of passenger transportation services – Baggage charges

An airline charges an excess baggage fee to an individual who exceeded the checked baggage allowance for the airline's domestic passenger transportation service supplied in New Brunswick. The place of supply for the service of transporting the excess baggage is the province where the supply of the passenger transportation service is made, which in this case is New Brunswick (a participating province). The HST will apply to the service at the New Brunswick rate.

Child supervision

The place of supply for the service of supervising an unaccompanied child in connection with a passenger transportation service is, if made by the supplier of the passenger transportation service, the same province in which the supply of the passenger transportation service is made.

Example – Services related to the supply of passenger transportation services – Child supervision

An airline supplies the service of supervising an unaccompanied child during a domestic passenger transportation service supplied by the airline in Ontario. The place of supply for the service of supervising the unaccompanied child is the province where the supply of the passenger transportation service is made, which in this case is Ontario (a participating province). The HST will apply to the service at the Ontario rate.

Services related to a ticket, voucher or reservation

The place of supply for the service of issuing, delivering, amending, replacing or cancelling a ticket, voucher or reservation for a passenger transportation service, made by the supplier of the passenger transportation service, is the same province in which the supply of the passenger transportation service is made, if the passenger transportation service had been completed in accordance with the agreement for that supply.

Example – Services related to the supply of passenger transportation services – Services related to a ticket, voucher or reservation

An airline cancels a ticket for an individual in respect of a flight by the airline from Ottawa to Toronto that specifies Ottawa as the origin of the continuous journey. The place of supply for the service of cancelling the ticket is Ontario because the place of supply for the passenger transportation service to which the ticket would have applied is Ontario (a participating province). The HST will apply to the service of cancelling the ticket at the Ontario rate.

Postage and mail delivery services

The place of supply for a right to a mail delivery service, as evidenced by a postage stamp or a postage-paid card, package or similar item (other than an item bearing a "business reply" indicia) that is authorized by the Canada Post Corporation, is the province in which the supplier delivers the stamp or item to the recipient.

The place of supply for a mail delivery service, for which the postage stamp, postage-paid card, package or similar item is used as evidence of the payment of postage for the mail delivery service, is the province in which the stamp or item is delivered. However, this rule does not apply in circumstances where either of the following conditions are met:

  • The supply of the service is made under a bill of lading.
  • The consideration for the supply of the service is $5 or more and the address to which the mail is sent is not in a participating province.

In either of these circumstances, the place-of-supply rules as explained in the freight transportation services section determine the place of supply for the mail delivery service. As a result, the place of supply for the mail delivery service in these circumstances would be a province if the destination of the service is in that province.

There is a separate place-of-supply rule that applies to the goods that are delivered and to which the mail delivery service relates. For more information, see Goods and other tangible personal property.

Examples – Postage and mail delivery services

Example 1

An individual buys several postage stamps at a retail postal outlet in Ontario that he will eventually use to mail letters. The place of supply of the stamps is Ontario (a participating province) because the individual takes delivery of the stamps in Ontario. The HST will apply to the postage stamps at the Ontario rate.

Example 2

An individual orders by mail-order a booklet of postage stamps. The supplier sends the booklet by mail to the individual's address in Ontario, and as a result, the place of supply of the booklet is Ontario (a participating province) because the supplier delivered the stamps to the individual in Ontario. The HST will apply to the supply of the booklet of postage stamps at the Ontario rate.

Postage meter

If the payment of postage for a mail delivery service supplied by the Canada Post Corporation, otherwise than under a bill of lading, is evidenced by a postage meter impression printed by a meter, the place of supply for the service is a province if the ordinary location of the meter is in that province when the recipient of the supply pays an amount to the Corporation for that postage. The ordinary location of the meter at a particular time is the location the supplier and the recipient mutually agree is the ordinary location of the meter at that time. The ordinary location may change from time to time.

If the supply is made under a bill of lading, the general place-of-supply rule for freight transportation services applies. As a result, the place of supply would be a province if the destination of the service is in that province.

Permit imprint

If the payment of postage for a mail delivery service supplied by the Canada Post Corporation, otherwise than under a bill of lading, is evidenced by a permit imprint, the place of supply is the province in which the recipient of the supply deposits the mail with the Corporation in accordance with the agreement between the recipient and the Corporation authorizing the use of the permit imprint.

If the supply is made under a bill of lading, the general place-of-supply rule for freight transportation services applies. As a result, the place of supply would be a province if the destination of the service is in that province.

Business indicia

If an item bearing a "business reply" indicia is used, the place-of-supply rule for freight transportation services applies. As a result, the place of supply would be a province if the destination of the service is in that province.

1-900 or 976 telephone services

The place of supply for a service provided by telephone and accessed by calling a number beginning with 1-900 or 976 is the province in which the telephone call originates.

Example – 1-900 or 976 telephone services

You make a 1-900 telephone call from Ontario. The place of supply is Ontario (a participating province) because the call originates in Ontario. The HST will apply to the service at the Ontario rate.

Services related to a location-specific event

The general rules for supplies of services will not apply to the supply of a service that relates to a location-specific event (for example, a performance, festival, ceremony, convention, conference, symposium, or other similar event) if the service is performed primarily (more than 50%) at a location of the event in a province. The place of supply of such a service will be the province in which the service is primarily performed.

Example – Services related to a location-specific event

You hire an audio-visual company based in Montreal, Quebec to provide lighting and other special effects at a gala event that you are organizing. The services will be performed at the convention centre in Kingston, Ontario, where the gala will take place. The place of supply for the service is Ontario (a participating province) and the audio-visual firm will charge the HST at the Ontario rate.

Services of a trustee for a trust governed by an RRSP, an RRIF, an RESP, an RDSP or a TFSA.

The place of supply for a service for a trust governed by an RRSP, an RRIF, an RESP, an RDSP or a TFSA provided by a trustee of the trust is a province if the mailing address of the annuitant of the RRSP or RRIF, of the subscriber of the RESP or of the holder of the RDSP or TFSA is in that province.

For purposes of this place-of-supply rule, the following are as defined in subsection 248(1) of the Income Tax Act:

  • RRSP means a registered retirement savings plan
  • RRIF means a registered retirement income fund
  • RESP means a registered education savings plan
  • RDSP means a registered disability savings plan
  • TFSA means a tax free savings account
Example – Services of a trustee for a trust governed by an RRSP, an RRIF, an RESP, an RDSP or a TFSA  

A trustee in Quebec supplies a service for a trust governed by an RRSP to an annuitant of the RRSP who has a mailing address in Ontario. The place of supply is Ontario (a participating province) because the mailing address of the annuitant is in Ontario. The HST will apply to the service at the Ontario rate.

Services rendered in connection with litigation

The general place-of-supply rules for services will not apply to a service rendered in connection with criminal, civil or administrative litigation in a province. The place of supply for a service that is rendered in connection with criminal, civil or administrative litigation in a province (other than a service rendered before the commencement of such litigation), is that province. A supply of such a service rendered before the commencement of such litigation is subject to the general place-of-supply rules for services.

Examples – Services rendered in connection with litigation

Example 1

An individual from Brandon, Manitoba receives a speeding ticket in Kenora, Ontario. They hire a lawyer from Kenora to contest the ticket. The place of supply for the lawyer's services is Ontario (a participating province) because they are supplied in connection with litigation in Ontario. The HST will apply at the Ontario rate.

Example 2

An individual from Cold Lake, Alberta is injured during a fishing trip in Newfoundland and Labrador. After returning to Alberta, they phone a lawyer to see if they would have a cause of action against the Newfoundland and Labrador charter company that organized the trip. The lawyer obtains the individual's home address in Alberta in the normal course of their business. The lawyer advises the individual that they have a cause of action against the charter company. The individual asks the lawyer to file a statement of claim against that company. The lawyer files the statement of claim in Newfoundland and Labrador. The GST will apply to the services supplied prior to the commencement of the litigation since the place of supply of these services is Alberta (a non-participating province). The HST will apply to the lawyer's services supplied after the commencement of litigation at the Newfoundland and Labrador rate since the place of supply of these services is Newfoundland and Labrador (a participating province).

Telecommunication services

The place of supply for a telecommunication service of making telecommunications facilities available (other than a service of granting sole access to a telecommunications channel) is the province where all of the facilities are ordinarily located. Where not all of the facilities are ordinarily located in that province, the place of supply is a province if the invoice for the supply is sent to an address in that province.

For other types of supplies of telecommunication services (other than a service of granting sole access to a telecommunications channel), the place of supply is a province if the telecommunication:

  • is both emitted and received in that province
  • is either emitted or received in that province and the billing location for the service is located in that province
  • is emitted in that province and received outside that province and the billing location for the service is not in the province where the telecommunication is emitted or received

Billing location

For purposes of the place-of-supply rules that determine the province in which a supply of a telecommunication service is made, the billing location for a telecommunication service is in a province if the fee for the service is charged or applied to an account that the recipient has with the supplier of the service, the account relates to telecommunications facilities that are used or are available for use by the recipient to obtain telecommunication services, and all of those facilities are ordinarily located in that province. Where, from time to time, the supplier and the recipient mutually agree on the ordinary location of the telecommunications facilities at a particular time, that location is considered to be the ordinary location of the telecommunication facilities at the particular time.

If the fee for the service is not charged or applied to an account that the recipient has with the supplier of the telecommunication service, the billing location is considered to be in a province if the telecommunications facility used to initiate the service is located in that province.

Example – Telecommunication services

Example 1

An individual makes a long-distance telephone call from Toronto, Ontario to Ottawa, Ontario using a cellular phone with a billing location in Quebec. The place of supply for the telecommunication service is Ontario (a participating province) because the telecommunication is emitted and received in Ontario. The HST will apply to the service at the Ontario rate.

Example 2

An individual makes a long-distance telephone call from Toronto, Ontario to Montreal, Quebec. The billing location for the service is in Ontario. The place of supply for the telecommunication service is Ontario (a participating province) because the telecommunication is emitted in Ontario and the billing location for the service is in Ontario. The HST will apply to the service at the Ontario rate.

Example 3

An individual makes a long-distance telephone call from Toronto, Ontario to Vancouver, British Columbia. The billing location for the service is in Quebec. The place of supply for the telecommunication service is Ontario (a participating province) because the telecommunication is emitted in Ontario and the billing location is not in a province in which the telecommunication is emitted or received. The HST will apply to the service at the Ontario rate.

Dedicated telecommunications channel

A supply of a telecommunication service of granting sole access to a telecommunications channel for transmitting telecommunications between 2 provinces is considered to be a separate supply of the service made in each of those provinces as well as a separate supply in any province between them. The amount of consideration for the supply in each province is calculated based on the part of the overall distance over which the telecommunication will be transmitted that will occur in the particular province if the telecommunication were transmitted solely by means of cable and related facilities located in Canada that connected, in a direct line, the transmitters for emitting and receiving the telecommunications.

Example – Telecommunication services – Dedicated telecommunications channel

A Canadian telecommunication carrier supplies the sole use of a telecommunications line between a place in Ontario and a place in Quebec to a corporation based in Ontario. The direct line distance in kilometres of the part of the telecommunications channel that is located in Ontario represents 80% of the total direct line distance of the channel between the transmitters in Ontario and Quebec. The direct line distance in kilometres of the part of the telecommunications channel that is located in Quebec represents 20% of the total direct line distance of the channel between the transmitters in Ontario and Quebec.

The supply of the telecommunication service of granting sole access to the telecommunications channel between Ontario and Quebec is considered to be a separate supply of a telecommunication service made in each of those provinces. The place of supply of the telecommunication service made in Ontario is Ontario (a participating province) and the HST will apply to the service at the Ontario rate. The amount of consideration for this supply is equal to 80% of the total amount for the sole access to the telecommunications channel. The place of supply of the telecommunication service made in Quebec is Quebec (a non-participating province) and the GST will apply to the service. The amount of consideration for this supply is equal to 20% of the total amount for the sole access to the telecommunications channel.

Repairing, maintaining, cleaning or altering goods, or producing photographic-related goods

Where the relevant conditions have been met, this place-of-supply rule overrides the place-of-supply rule for supplies of services in relation to tangible personal property and the general place-of-supply rules for supplies of tangible personal property.

These specific place-of-supply rules apply where a person receives goods of another person for any of the following purposes:

  • supplying a service of repairing, maintaining, cleaning, adjusting or altering the property
  • producing a negative, transparency, photographic print or other photographic-related good

The place of supply for the service (and for any property supplied in connection with it) or for the photographic-related good is the province where the supplier delivers the property to the recipient after the service or production of the photographic-related good is completed.

For purposes of this rule, property is considered to be delivered in a particular province, and not in any other province, if the supplier does either of the following:

  • ships the property to a destination in the province that is specified in the contract for carriage of the good or transfers possession of the property to a common carrier or consignee that the supplier has retained on behalf of the recipient to ship the property to such a destination
  • sends the property by mail or courier to an address in the particular province
Examples – Repairing, maintaining, cleaning or altering goods, or producing photographic-related goods

Example 1

A consumer in Ontario sends a computer needing repair to a computer repair depot in Quebec. The computer is repaired in Quebec and then shipped by the computer repair depot to the consumer in Ontario. The place of supply for the repair service is Ontario (a participating province) because the repaired computer is shipped to the consumer at an address in Ontario. The HST will apply to the supply of the repair service at the Ontario rate.

Example 2

A consumer in Quebec sends a musical instrument needing repair to a musical instrument repair store in Ontario. The instrument is repaired in Ontario and then shipped by the repair store to the consumer in Quebec. The place of supply for the repair service is Quebec (a non-participating province) because the repaired instrument is shipped to the consumer at an address in Quebec. The GST will apply to the supply of the repair service.

Intangible personal property

For intangible personal property (IPP), 1 of these 4 general rules usually determine the place of supply, unless any of the other specific rules apply.

General rule 1 – IPP that can only be used primarily in non-participating provinces

The place of supply for IPP is a non-participating province if the Canadian rights related to the IPP can only be used primarily (more than 50%) in non-participating provinces.

Example – General rule 1 – IPP that can only be used primarily in non-participating provinces

An individual buys a theatre pass in Quebec. The pass gives the individual the right to attend 7 plays in Quebec and 3 plays in New Brunswick. The place of supply is Quebec (a non-participating province) since the IPP can only be used primarily in Quebec. The GST will apply to the sale of the pass.

General rule 2 – IPP that can only be used primarily in participating provinces

When there’s a province of primary use

If the Canadian rights to the IPP can only be used primarily (more than 50%) in participating provinces, the place of supply is a participating province if an equal or larger proportion of the Canadian rights cannot be used in any other participating province.

This rule does not apply if either of the following situations apply:

  • The use of the rights is not specifically limited to one or more participating provinces (for example, the rights can be used on an unlimited basis in more than one participating province).
  • The province where the largest proportion of the Canadian rights can be used cannot be determined.
Example – General rule 2 – IPP that can only be used primarily in participating provinces

Company A company licences software to Company B in Ontario. The software is downloaded over the internet. The licence provides that the software can only be used from Company B's head office in Ontario.

The place of supply is Ontario (a participating province) because the Canadian rights for the software can only be used primarily in participating provinces and an equal or larger proportion of the Canadian rights cannot be used in a participating province other than Ontario. The HST will apply at the Ontario rate.

When there’s not a province of primary use

Rule 2a – Consideration of $300 or less

If the value of the consideration for the supply of IPP is $300 or less, the place of supply is the participating province where the IPP can be used if the supply is made through either of the following:  

  • the supplier’s permanent establishment in that province and in the presence of an individual who is, or acts on behalf of, the recipient
  • the supplier’s vending machine in that province and in the presence of an individual who is, or acts on behalf of, the recipient
Example – Rule 2a – Consideration of $300 or less

An individual buys a movie pass that provides 10 admissions to any of a movie chain's 5 theatres in Nova Scotia and New Brunswick. They pay less than $300 for the pass at one of the chain's New Brunswick locations.

The place of supply for the IPP is New Brunswick (a participating province) because the Canadian rights for the pass can only be used primarily in the participating provinces, the supply is made through a permanent establishment of the supplier in New Brunswick in the presence of an individual who is the recipient and the pass can be used in New Brunswick. The HST will apply at the New Brunswick rate.

Rule 2b – Address in Canada obtained

If rule 2a does not determine the place of supply, the participating province of the recipient’s address will be the place of supply if the supplier obtains that address in the normal course of business and the IPP can be used in that province. If the supplier:

  • obtains only one address that is a home or business address in Canada, the supplier uses that home or business address
  • obtains more than one such address, the supplier uses the home or business address most closely connected with the supply
  • does not obtain such an address, the supplier uses the address in Canada of the recipient that is most closely connected with the supply
Example – Rule 2b – Address in Canada obtained

Company A in New Brunswick licences software to Company B in Newfoundland and Labrador. The software is downloaded over the internet. The licence provides that the software can only be used from Company B's offices in Newfoundland and Labrador and New Brunswick. In the ordinary course of its business, the supplier only obtains a business address of the recipient that is in Newfoundland and Labrador. That address is also the billing address for the supply.

The place of supply is Newfoundland and Labrador (a participating province) because the Canadian rights for the software can only be used primarily in the participating provinces and, in the ordinary course of its business, the supplier only obtains a business address of the recipient that is in Newfoundland and Labrador. The HST will apply at the Newfoundland and Labrador rate.

Rule 2c – Higher tax rate

If rules 2a and 2b do not determine the place of supply, it will be the participating province with the highest HST rate of the provinces where the IPP can be used. If 2 or more of those participating provinces have the same highest tax rate, the place of supply is one of those provinces.

Example – Rule 2c – Higher tax rate

A company in Nova Scotia supplies a Quebec business with intellectual property rights that can only be used in Nova Scotia and Ontario. The business address of the recipient obtained by the Nova Scotia company in the ordinary course of business is in Quebec. The Canadian rights for the IPP can only be used primarily in participating provinces. Although the supplier obtains the recipient's business address, that address is in Quebec which is a province where the IPP cannot be used.

The place of supply is Nova Scotia since it’s the participating province that has the highest tax rate of the participating provinces where the IPP can be used. The HST will apply at the Nova Scotia rate.

General rule 3 – IPP that is not limited to general rules 1 and 2

The following rules can apply when the Canadian rights for the IPP are not limited to being used only primarily in the participating provinces or to being used only primarily in non-participating provinces.

Rule 3a – Consideration of $300 or less

If the value of the consideration for the supply of IPP is $300 or less, the place of supply is the province where the IPP can be used if the supply is made through either of the following:

  • the supplier’s permanent establishment in that province in the presence of an individual who is, or acts on behalf of, the recipient
  • the supplier’s vending machine in that province in the presence of an individual who is, or acts of behalf of, the recipient
Example – Rule 3a – Consideration of $300 or less

An individual bought a movie pass that provides 10 admissions to any of a popular movie chain's locations. The chain has at least 1 location in every Canadian province. The individual paid less than $300 for the pass at one of the chain's Ontario locations.

The place of supply for the IPP is Ontario (a participating province) because the Canadian rights for the pass are not limited to being used primarily (more than 50%) in participating provinces or primarily in non-participating provinces, the supply is made in the presence of the recipient through a permanent establishment of the supplier in Ontario and the IPP can be used in Ontario. The HST will apply at the Ontario rate.

Rule 3b – Address in Canada obtained

If rule 3a does not determine the place of supply, the province of the recipient’s address will be the place of supply if the supplier obtains that address in the normal course of business and the IPP can be used in that province. If the supplier:   

  • obtains only one address that is a home or business address in Canada, the supplier uses that home or business address
  • obtains more than one such address, the supplier uses the home or business address most closely connected with the supply
  • does not obtain such an address, the supplier uses the address in Canada of the recipient that is most closely connected with the supply
Example – Rule 3b – Address in Canada obtained

A company in New Brunswick licences software to a business in New Brunswick. The software is downloaded over the internet. There are no restrictions on where the software can be used. In the ordinary course of its business, the supplier only obtains a business address of the recipient that is in New Brunswick. That address is also the billing address for the supply.

The place of supply is New Brunswick (a participating province) because the Canadian rights for the software are not limited to being used primarily in a participating province or a non-participating province. In the ordinary course of its business, the supplier only obtains a business address of the recipient in New Brunswick, and the IPP can be used in New Brunswick. The HST will apply at the New Brunswick rate.

Rule 3c – Higher tax rate

If rules 3a and 3b do not determine the place of supply, it will be the participating province with the highest HST rate of the provinces where the IPP can be used. If 2 or more of those participating provinces have the same highest tax rate, the place of supply is one of those provinces.

Example – Rule 3c – Higher tax rate

An individual buys an air transportation pass in Ontario. The pass gives them unlimited travel between Ontario, Manitoba, Saskatchewan and Alberta. The supplier in Ontario does not obtain the individual's address.

The place of supply is Ontario because it’s the participating province that has the highest tax rate of the provinces where the IPP can be used, and the Canadian rights for the pass are not limited to being used primarily in a participating province or a non-participating province. The HST will apply at the Ontario rate.

Other specific rules
IPP that relates to goods or other tangible personal property

For the topic of "IPP that relates to goods or other tangible personal property", we use the word goods to refer to all tangible personal property.

The previous general rules do not apply to supplies of IPP that relate to goods (such as the right to buy goods). For these supplies, the following place-of-supply rules apply.

For purposes of these rules, the ordinary location of the goods is considered to be the place the supplier and the recipient mutually agree on, even if the goods are actually located at a different place. The ordinary location would change if the supplier and recipient mutually agree on a different location. The ordinary location would be that new location.

Rule 1 – Ordinary location not primarily in participating provinces

The place of supply for IPP that relates to goods that are ordinarily located in Canada is a non-participating province if those goods are not ordinarily located primarily (more than 50%) in participating provinces.

Rule 2 – Ordinary location primarily in participating provinces

The place of supply for IPP that relates to goods is a participating province if the goods ordinarily located in Canada are ordinarily located primarily (more than 50%) in participating provinces, and an equal or larger proportion of the goods are not ordinarily located in any other participating province.

Example – Rule 2 – IPP that relates to goods ordinarily located primarily in participating provinces

An Ontario company supplies IPP to a Quebec company. The IPP relates to goods ordinarily located in Nova Scotia.

The place of supply is Nova Scotia (a participating province) because the goods are ordinarily located in Canada, primarily in the participating provinces, and the largest proportion of the goods ordinarily located in the participating provinces is in Nova Scotia. The HST will apply at the Nova Scotia rate because the IPP relates to goods ordinarily located in Nova Scotia.

Rule 3 – Higher tax rate

If rule 2 does not determine the place of supply because the goods are ordinarily located in equal proportions in 2 or more participating provinces, the place of supply is the participating province out of those provinces where the tax rate is the highest. If 2 or more of those participating provinces have the same highest tax rate, the place of supply is one of those provinces.

IPP that relates to real property

The previous general rules do not apply to supplies of IPP that relate to real property. For these supplies, the following place-of-supply rules apply.

The place of supply for IPP that relates to real property is in Canada if that real property is located in Canada. The place of supply for IPP that relates to real property is outside Canada if the real property is located outside Canada. If the real property is located both in Canada and outside Canada, only the proportion of the supply that relates to the real property located in Canada is considered to be made in Canada.

To find out if a supply is considered to be a supply of real property instead of a supply of IPP that relates to real property, see GST/HST Technical Information Bulletin B-103, Harmonized Sales Tax – Place-of-supply rules for determining whether a supply is made in a province.

Rule 1 – Real property not located primarily in participating provinces

The place of supply for IPP that relates to real property is a non-participating province if the real property that’s located in Canada is not located primarily (more than 50%) in participating provinces. 

Rule 2 – Real property located primarily in participating provinces

The place of supply for IPP that relates to real property is a participating province if the real property located in Canada is located primarily (more than 50%) in participating provinces, and an equal or larger proportion of the real property is not located in any other participating province.

Example – Rule 2 – Real property located primarily in participating provinces

A New Brunswick company supplies a Quebec company with IPP that relates to commercial real property located entirely in New Brunswick. The real property located in Canada to which the IPP related is located primarily in the participating provinces and the participating province in which the largest proportion of the real property is located is New Brunswick. The place of supply is New Brunswick and the HST will apply at the New Brunswick rate.  

Rule 3 – Higher tax rate

If Rule 2 does not determine the place of supply because the real property is located in equal proportions in 2 or more participating provinces, the place of supply is the participating province out of those provinces where the tax rate is the highest. If 2 or more of those participating provinces have the same highest tax rate, the place of supply is one of those provinces.

IPP that relates to passenger transportation services

These place-of-supply rules apply to a supply of IPP that is, or is similar to, a passenger transportation pass that gives an individual the right to one or more passenger transportation services.

The place of supply is a participating province if, at the time the supply is made, the supplier can determine that each passenger transportation service covered by the pass could only begin in that participating province and would terminate in Canada.

The place of supply is a non-participating province if, at the time the supply is made, the supplier can determine that each passenger transportation service covered by the pass could only begin in a non-participating province or would terminate outside Canada.

If the place of supply of the pass cannot be determined under these rules, the general place-of-supply rules for IPP would determine the place of supply of the pass.

Example – IPP that relates to passenger transportation services

An individual who lives in Ottawa and buys a rail pass in Ontario that gives him the right to 10 one-way trips from Ottawa to Toronto. When the supply of the IPP is made, the supplier can determine that all the passenger transportation services will begin in a single province and terminate in Canada. The place of supply of the IPP is therefore Ontario (a participating province) and the HST will apply at the Ontario rate.

Find out if you have to pay the provincial part of the HST for property and services brought into a participating province

You may have to self-assess (pay) the provincial part of the HST if you buy goods, services or intangible personal property (IPP) in a non-participating province, but you use, consume, or supply them within the participating provinces. You may also have to self-assess if you use, consume, or supply goods, services or IPP in a participating province with a higher HST rate than the participating province where you acquired them.

You will not have to self-assess the provincial part of the HST if the tax payable from all amounts to be self-assessed in a calendar month is less than $25.

This does not apply to motor vehicles required to be registered in a participating province and to persons using simplified accounting.

Use the following sections to determine if you need to self-assess on:

Goods (does not include motor vehicles)

You have to self-assess the provincial part of the HST when:

  • you buy taxable (other than zero-rated) goods:
    • in a non-participating province and you later bring, or cause someone else to bring, the goods into a participating province
    • in a participating province and you later bring, or cause someone else to bring, the goods into another participating province for which the rate of HST is higher
  • you consume, use, or supply the goods less than 90% in your commercial activities

You do not have to self-assess the provincial part of the HST if you are a registrant and the property is consumed, used, or supplied at least 90% in your commercial activities.

If you bought the goods (other than a motor vehicle) from someone with whom you are dealing at arm's length, you have to remit the provincial part of the HST on the lesser of:

  • the amount paid or payable for the goods
  • the fair market value (FMV) of the goods when they are brought into a participating province

If you bought goods (other than a motor vehicle) from someone with whom you are not dealing at arm's length, you have to remit the provincial part of the HST on the FMV of the goods when they are brought into a participating province.

For more information, see Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).

How to self-assess

If you are registered for the GST/HST, the tax is payable when the goods are brought into a participating province. Enter this amount on line 405 of your GST/HST return. You may be entitled to claim an ITC for the tax you self-assess on the goods depending on the percentage of use in your commercial activities. For more details on ITCs, see Input tax credits.

If you are not registered for the GST/HST and have to self-assess the part of the HST, use Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).

Intangible personal property and services

Service

You pay GST when you receive a supply of a service that is made in a non-participating province. If you are a resident of a participating province and you acquire a service in a non-participating province for consumption, use or supply more than 10% in the participating provinces, you will have to self-assess the provincial part of the HST.

The same rule applies for a supply of a service that is made in a participating province where 10% or more of the service will be used, consumed, or supplied in participating provinces for which the rate of HST is higher.

You do not have to self-assess the provincial part of the HST if you are a registrant and the service is consumed, used, or supplied at least 90% in your commercial activities or on certain transportation and telecommunication services, legal services, or where the service is for goods that are removed from the participating province as soon as the service has been performed.

For more information, see Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).

IPP

If you are a resident in a participating province and you receive a supply of IPP (such as franchise rights) that is made in a non-participating province that you acquired for use, consumption, or supply 10% or more in the participating province, you have to self-assess the provincial part of the HST.

The same rule applies for a supply of IPP that is made in a participating province that you acquired for use, consumption, or supply 10% or more in participating provinces for which the rate of HST is higher.

You do not have to self-assess the provincial part of the HST if you are a registrant and the IPP is used, consumed or supplied 90% or more in your commercial activities. You also do not have to self-assess the provincial part of the HST on certain supplies of IPP including IPP supplied by way of certain leases and licences and in certain instances where the person previously paid tax on the IPP.

For more information, see Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).

How to self-assess

The tax is payable when the payment for the service or IPP is paid or becomes due. If you are a registrant, enter the amount on line 405 of your GST/HST return. You can also claim an ITC for the tax you self-assessed on these services and IPP to the extent that they are for consumption, use, or supply in your commercial activities.

If you are not registered for GST/HST and have to self-assess the part of HST, use Form GST489, Return for Self-Assessment of the Provincial Part of Harmonized Sales Tax (HST).

Motor vehicles

For motor vehicles that require registration under the laws of a participating province, the tax is payable to the Receiver General, but collected by the provincial licensing authorities on the earlier of:

  • the day you register the vehicle in the participating province
  • the day on or before which you have to register the vehicle

A specified motor vehicle is defined to mean a vehicle that is, or that would be, if it were imported, classified under several tariff items in Schedule I to the Customs Tariff. Generally, this includes almost all motor vehicles, other than racing cars classified under heading number 87.03, and any prescribed motor vehicles.

For more information, see Find out how the GST/HST applies to a sale of a specified motor vehicle from a GST/HST registrant.

How to claim a rebate for the provincial part of the HST for property or services brought into a non-participating province or into a participating province with a lower HST rate  

You may be eligible for a rebate of the provincial part of the HST you paid on property and services brought into a non-participating province, or into another participating province for which the rate for the provincial part of the HST is lower.

To determine if you can recover the provincial part of the HST for:

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