Place of Supply Rules in Canada — How to Charge the Right Sales Tax

One of the most common tax mistakes Canadian businesses make: charging tax based on their own province instead of their client's.

The Core Rule

For most goods and services, you charge tax based on where the supply is made — which usually means where your client is located, not where you are.

This means a web developer in Calgary (Alberta, 5% GST) invoicing a client in Toronto (Ontario, 13% HST) must charge 13% HST, not 5% GST.

How It Works by Supply Type

Services

The place of supply is generally where the client is located. For businesses, this is their business address. For consumers, it's their usual place of residence.

Physical Goods

The place of supply is where the goods are delivered. Ship to Ontario? Charge Ontario's rate. Ship to Alberta? Charge Alberta's rate.

Digital Products

Digital products follow the same rules as services — the client's location determines the tax rate.

Cross-Province Scenarios

Alberta freelancer → Ontario client (service)

• Charge: 13% HST
• Remit: HST to CRA

BC business → Quebec client (service)

• Charge: 5% GST + 9.975% QST
• Remit: GST to CRA, QST to Revenu Québec
• Note: You must register for QST if your Quebec sales exceed $30K

Ontario business → Alberta client (service)

• Charge: 5% GST only
• Remit: GST to CRA

The Quebec Complication

If you're outside Quebec but sell to Quebec clients, you need to register for QST once your Quebec sales exceed $30,000. You'll then remit QST directly to Revenu Québec, separate from your GST remittance to CRA.

Why This Matters

Getting place of supply wrong means either:

• Undercharging tax — you owe CRA the difference out of pocket
• Overcharging tax — your client pays more than they should and may lose trust

Let Facturo Handle It

Facturo applies the correct tax rate automatically based on your client's province. No manual lookups, no mistakes. Join the waitlist.