What Is the HST?
The harmonized sales tax (HST) replaces the provincial sales tax (PST) and the goods and services tax (GST) in the participating provinces. It applies to the taxable supply of goods and services made in the following provinces:
- Prince Edward Island
- New Brunswick
- Nova Scotia
- Newfoundland and Labrador
Collecting the HST
The HST applies according to the same rules as those governing the GST. HST rates can vary from one participating province to another.
Businesses registered for the GST are automatically registered for the HST. They must collect and remit the HST on all taxable supplies (except zero-rated supplies) made in a participating province. These supplies include:
- the sale of tangible personal property
- the lease of tangible personal property
- the sale of services
The place of supply rules apply for the purpose of determining whether or not a sale is considered made in a participating province. Québec businesses that are registered for the GST and that do business in the participating provinces must take these rules into account in deciding whether they must collect the GST or the HST on supplies made to residents of these provinces.
Special rules for the sale of road vehicles
Special rules apply to the sale of road vehicles. If a road vehicle is sold by a GST/HST registrant in a non-participating province (Québec, for example) and then taken to a participating province and the GST has been collected on the vehicle, the purchaser must pay the provincial component of the HST when registering the vehicle in the participating province.
However, if the road vehicle is acquired from a non-GST/HST registrant in a non-participating province and the vehicle is then taken to a participating province, the purchaser must pay the provincial motor vehicle tax when registering the vehicle, and cannot claim an input tax credit (ITC).
Contact our client services or the Revenu Québec office nearest you for the rules governing the supply of other property and services in a participating province. Such supplies include:
- intangible personal property
- real property and services associated with real property
- passenger and freight transportation services
- telecommunications services