WHEN DO I CHARGE HST VS QST VS GST?

One of the most confusing parts of running a business in Quebec or selling across Canada is knowing which sales tax to charge. Should you charge GST? QST? HST? Or a combination? The answer is based not on where your business is located, but where your customer is located. Misapplying these rules can lead to incorrect invoicing, dissatisfied clients, filing errors, refund delays, and Revenue Québec or CRA audits. This guide explains exactly when you must charge HST, GST, or QST so your sales tax compliance is always correct.

Understanding place-of-supply rules is essential for all interprovincial or online sellers.

LEGAL AND REGULATORY FRAMEWORK

Canadian sales tax rules come from:

• Excise Tax Act governs GST and HST
• Quebec Taxation Act governs QST
• provincial sales tax legislation (BC, SK, MB)

These laws require businesses to charge tax based on customer location and the nature of the supply.

Key points:

• Quebec is NOT an HST province.
• Quebec uses GST (5%) + QST (9.975%).
• HST applies in certain provinces at 13%–15%.
• BC, SK, MB use PST (separate from GST).

KEY COURT DECISIONS

Courts have consistently ruled that:

• place-of-supply rules determine which tax applies, not seller location
• GST/HST must be charged to HST province customers, even from Quebec
• QST cannot be charged when the customer is outside Quebec unless rules require it
• sellers must configure tax systems correctly
• misapplied tax must be corrected and may result in reassessments

These rulings make accuracy essential for cross-border sales.

WHY BUSINESSES GET CONFUSED ABOUT WHICH TAX TO CHARGE

Common issues include:

• assuming Quebec sellers only charge GST/QST
• forgetting to charge HST to Ontario or Atlantic customers
• misunderstanding shipping vs. pick-up rules
• relying on accounting software defaults
• mixing B2B and B2C rules
• assuming digital services follow special exemptions (they don’t)
• applying QST based on billing address rather than delivery address

Place-of-supply rules remove these uncertainties once understood.

WHEN DO YOU CHARGE HST VS QST VS GST? HERE IS THE CLEAR RULE:

1. Customer in Quebec → Charge GST + QST

This applies whether the sale is:

• in person
• shipped within Quebec
• an online service
• a digital product
• a subscription

2. Customer in an HST province → Charge HST

HST applies in:

• Ontario
• Nova Scotia
• New Brunswick
• Newfoundland and Labrador
• Prince Edward Island

If your customer is in one of these provinces → charge HST, even if your business is in Quebec.

3. Customer in a GST-only province → Charge GST only

These provinces/territories use GST only:

• Alberta
• Northwest Territories
• Nunavut
• Yukon

QST does not apply.

4. Customer in BC, SK, MB → Charge GST + PST (if applicable)

These provinces use both GST and provincial PST:

• British Columbia (PST 7%)
• Saskatchewan (PST 6%)
• Manitoba (RST 7%)

Depending on what you sell, you may need separate PST registration.

5. Customer outside Canada → Usually charge 0% GST/QST (zero-rated)

Exports of goods and many services are zero-rated.
Digital services may still follow special rules, but QST generally does not apply.

6. Digital services sold into Quebec → Charge QST

If you sell SaaS or digital products to Quebec consumers, QST applies — even if you are outside Quebec.

7. Pick-up vs. shipping rules

• If the customer picks up the item in Quebec → QST applies.
• If the item is shipped to another province → charge based on destination, not seller location.

8. Mixed sales (multi-item orders)

Each item must follow its own place-of-supply rule.
Tax must be allocated correctly.

COMMON MISTAKES SELLERS MAKE

• charging GST/QST to Ontario clients instead of HST
• charging QST on goods shipped to other provinces
• forgetting PST obligations in BC, SK, or MB
• misapplying tax on remote or digital services
• assuming Shopify or Amazon settings are correct
• using one tax code for all sales
• relying on billing addresses instead of delivery location

These issues frequently trigger adjustments or refund reviews.

MACKISEN STRATEGY

Mackisen CPA helps businesses set up accurate multi-province tax systems. We:

• configure tax codes for all provinces
• update invoicing and POS systems
• fix e-commerce tax settings (Shopify, Amazon, WooCommerce)
• determine PST registration needs
• prepare adjustments for past tax errors
• protect businesses from CRA/Revenue Québec reassessments

Our cross-province tax matrices ensure perfect compliance in every jurisdiction.

REAL CLIENT EXPERIENCE

A Montreal contractor billed Ontario clients GST instead of HST. Mackisen corrected filings and avoided penalties.

A Shopify seller charged QST to customers outside Quebec. Mackisen rebuilt their tax settings and filed adjustments.

A coaching business delivering online services misapplied GST to Quebec clients. Mackisen registered them for QST and corrected all invoices.

COMMON QUESTIONS

Do I ever charge QST to Ontario customers?
No. Ontario requires HST.

Do digital products follow the same rules?
Yes customer location determines tax.

How do I handle customers in BC?
Charge GST and PST if required. PST often requires separate registration.

Do I need to charge QST if I’m based outside Quebec?
Yes, if your customer is in Quebec and the supply is taxable.

WHY MACKISEN

With more than 35 years of combined CPA experience, Mackisen CPA Montreal ensures businesses apply the correct tax across all provinces. Our accurate, structured approach prevents costly sales tax mistakes and ensures audit-proof compliance.