As a rule, the export of tangible personal property from Canada is zero-rated for GST/HST purposes, as is the shipping of such property outside Québec for QST purposes. You are therefore not required to collect the taxes on such property sold to a person that intends to export it from Canada (or ship it outside Québec).

You can, however, claim input tax credits (ITCs) and input tax refunds (ITRs) to recover the taxes you paid on the property and services acquired to make or sell such property.

Conditions

The export or shipping of property is zero-rated when all the following conditions are met:

• The property is not an excisable good (such as an alcoholic beverage or a tobacco, cannabis or vaping product).
• The purchaser is not a consumer.
• Once the property has been delivered to the purchaser in Québec or elsewhere in Canada, it is shipped outside Québec or exported from Canada within a reasonable length of time.
• The property was not acquired for consumption, use or sale in Québec or Canada before being shipped outside Québec or exported from Canada.
• The property was not processed, transformed or altered in Québec or Canada after the sale and before being shipped outside Québec or exported from Canada by the purchaser, except to the extent required for its transport.
• The vendor provides proof that the purchaser exported the property from Canada since we may require this proof for audit purposes.)
• Proof of exportation outside Canada enables the entire shipment of property to be traced from its origin in Québec to its destination outside Canada. When the specific destination cannot be determined because of industry practices or because the property is homogeneous, we must be able to ascertain that the property did leave Canada.
• If the purchaser took possession of the property in Québec and then shipped it outside Québec but within Canada, the purchaser may not be able to provide acceptable proof of shipment outside Québec. In such case, a written statement signed by the purchaser attesting that the purchased property was shipped outside Québec is acceptable proof.
• If a person exports property that is electricity, crude oil or natural gas, or any other property transported by means of a wire, pipeline, or other conduit, the person is not a registrant.

A sale of property is also zero-rated under the following circumstances:

• The property is shipped internationally or outside Québec (for QST purposes) to a destination specified in the contract for carriage of the property.
• Possession of the property is transferred to a common carrier or a consignee retained on behalf of the purchaser to ship the property internationally or outside Québec (for QST purposes).
• The property is sent to a foreign address or to an address outside Québec (for QST purposes) by mail or by courier.

The supply of property and services in Canada under a warranty to a non-resident person who is not a registrant is generally zero-rated.

Certificates for purchasing property without paying taxes

An export trading house is a person at least 90% of whose commercial activities consist in exporting property outside Canada (under the GST system) or buying property in Québec for resale outside Québec (under the QST system). Such a person can request our authorization to use export certificates (shipping certificates) in order to purchase property without paying the taxes. These certificates serve as proof that the property is to be exported from Canada (or shipped outside Québec).

Eligible non-manufacturing businesses whose activities consist in exporting property from Canada (or shipping property outside Québec), and that add limited value through their processing or distribution activities, may use an export (or shipping) distribution centre certificate. This certificate allows the businesses to acquire the following property without paying the taxes:

• inventory
• property added to other property during processing
• customers' property that undergoes processing services

For more information about such certificates, contact us.

Refunds in certain situations

Tangible personal property purchased by a non-resident of Canada that is not a consumer

Under the GST system, if a person (other than a consumer) not resident in Canada and not registered for the GST/HST or the QST acquires tangible personal property (corporeal movable property) for export but does not meet the criteria for zero-rating mentioned above, the person must pay GST. However, they may be entitled to a refund of the tax paid, provided they:

• export the property from Canada within 60 days after delivery
• use the property primarily (more than 50%) outside Canada

To claim a GST/HST rebate, complete federal form GST189, General Application for GST/HST Rebates.

Under the QST system, if a person (other than a consumer) not resident in Canada purchases corporeal movable property for transport or shipment outside Québec but does not meet the criteria for zero-rating mentioned above, the person must pay QST. However, they may be entitled to a refund of the tax paid, provided they:

• take or ship the property outside Québec within 60 days after delivery
• use the property primarily (more than 50%) outside Québec

To claim a QST rebate, complete form FP-2189-V, General GST/HST and QST Rebate Application. For more information, see the Guide to the General GST/HST and QST Rebate Application (FP-2189.G-V).

Property and services purchased by a non-resident consumer

In general, you must collect GST/HST and QST on property purchased by non-resident consumers. A GST/HST and QST rebate may be granted for tax paid on certain property and services related to and supplied in connection with a foreign convention.

As a supplier of such property and services, you may pay or credit the rebate to your clients. You must report the amounts paid or credited using form FP-106-V, Information Return: Rebates Paid or Credited for Foreign Conventions and Tour Packages.

For more information, see GST/HST Information for the Travel and Convention Industry at Canada.ca.

Persons resident in Canada, outside Québec

In general, if you reside in Canada but outside Québec, you can claim a rebate of the QST on tangible personal property (corporeal movable property under the QST) purchased in and shipped outside Québec by completing form VD-352-V, Application for a Rebate of the QST Paid on Corporeal Movable Property That Is Taken or Shipped Outside Québec to Another Location in Canada by a Person Resident in Canada.