Consumption/VAT/Sales Tax in Canada
- Nature of the Tax
- Three types of Sales taxes: GST (federal Goods and Services Tax), HST (the Harmonized Sales Tax) and PST (Provincial Sales Tax).
- Standard Rate
5% tax on goods and services + a variable provincial tax (PST or QST) of 0 to 10%.
In Newfoundland-Labrador, in Nova Scotia and New Brunswick, the provincial sales tax and the GST are replaced by a harmonized sales tax (HST) of 13%.
- Reduced Tax Rate
- There are exemptions for basic foodstuffs, pharmaceutical products and education. Insurance companies apply a rate of 9% to all premiums.
- Exclusion From Taxation
- Generally for basic and unprocessed foodstuffs.
- Method of Calculation, Declaration and Settlement
- The GST is calculated on the sales price first then added to it, and afterwards the provincial tax is applied and added to the total.
- Other Consumption Taxes
The law on excise tax imposes taxes on leaded or unleaded gasoline, diesel fuel and motor vehicles.
Some provinces add other taxes. For further information, consult the Department of Finance website.
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