What is the HST?
The HST is a sales tax that applies to most goods and services in Canada. Generally, if you are a GST/HST registrant, you have to charge and collect the sales tax for the government on all taxable supplies (other than zero-rated supplies) you provide to your customers.
Taxable supplies of goods and services
Most property and services supplies in or imported into Canada are subject to GST/HST. Examples of taxable supplies
- sales of new housing
- sales and rentals of commercial real property
- sales and leases of automobiles
- advertising
- taxi and limousine transportation
- legal and accounting services
- hotel accommodation
- barber and hairstylist services
Zero-rated supplies of goods and services
You do not collect the GST/HST on these supplies. Examples of taxable supplies
- basic groceries such as milk, bread, and vegetables
- agricultural products such as grain, raw wool, and dried tobacco leaves
- most farm livestock
- most fishery products such as fish for human consumption
- certain medical devices such as hearing aids and artificial teeth
- exports (most goods and services for which you charge and collect the GST/HST in Canada, are zero-rated when exported)
- many transportation services where the origin or destination is outside Canada
Exempt supplies of goods and services
You do not charge or collect the GST/HST on exempt supplies. You cannot claim ITCs to recover the GST/HST paid for your business expenses. Examples of exempt supplies.
- a sale of housing that was last used by an individual as a place of residence
- long-term rentals of residential accommodation (of one month or more) and residential condominium fees
- most health, medical, and dental services performed by licensed physicians or dentists for medical reasons
- child care services, where the primary purpose is to provide care and supervision to children 14 years of age or under for periods of less than 24 hours per day
- legal aid services
- many educational services
- music lessons
- most services provided by financial institutions such as lending money or operating deposit accounts
- the issuance of insurance policies by an insurer and the arranging for the issuance of insurance policies by insurance agents