Do I charge GST or HST to an out-of-province client?

Short answer: type of supply, place of supply, then rate

CRA says the GST/HST rate depends on where the supply is made. The supplier’s office, incorporation province, or home address is not an automatic rate selector. First confirm that the supplier is required or elected to collect tax and that the supply is taxable; then classify the supply and determine its place of supply.

For a taxable supply made in Canada that is not zero-rated, CRA’s current federal table uses 5% GST in non-participating provinces and territories, 13% HST in Ontario, 14% HST in Nova Scotia, and 15% HST in New Brunswick, Newfoundland and Labrador, and Prince Edward Island. Separate PST, QST, or RST obligations are outside that federal rate decision and may still require their own review.

For an ordinary service, the client address may lead

CRA says one of three general rules usually determines the place of supply for services unless a specific rule applies. Under general rule 1, if a supplier obtains one Canadian home or business address for the recipient in the normal course of business, the place of supply is the province of that address.

If the supplier obtains more than one Canadian home or business address, use the address most closely connected with the supply. If an obtained Canadian address is not known to be a home or business address, use the recipient address in Canada most closely connected with the supply. That is a fact test, not permission to choose whichever address produces the preferred rate.

CRA’s example uses a Québec supplier that designs a website for an Ontario company entirely from Québec. The supplier obtained the recipient’s Ontario business address, so the place of supply is Ontario and HST applies at Ontario’s rate. The work location and seller location do not override that ordinary address result.

If no Canadian client address is obtained, performance rules take over

When no recipient address in Canada is obtained, general rule 2 looks at where the Canadian part of the service is performed. If it is not performed primarily—more than 50%—in participating provinces, the place of supply is a non-participating province and 5% GST is the federal starting point.

If the Canadian part is performed primarily in participating provinces, the rule generally selects the participating province with the largest proportion. Equal proportions can lead to the participating province with the highest HST rate. CRA illustrates an Alberta web business with no client address using 5% GST and a Nova Scotia online editing business with no client address using Nova Scotia’s HST rate.

Obtaining and preserving the client’s relevant address in the ordinary course of business usually produces a clearer record than falling into the no-address rules after the invoice is issued.

Special service categories can override the ordinary address path

The general service rules are not universal. CRA publishes specific rules for services related to real property or goods, personal services, location-specific events, transportation, telecommunications, computer-related services and internet access, customs brokerage, litigation, and other defined categories.

Advisory, consulting, and professional services are usually subject to the general service rules unless another specific rule applies. A service label alone does not settle the category: review what the contract actually requires, what property, people, event, right, or location it concerns, and where that connection exists.

• Cleaning or construction tied to a specific building can follow the real-property rule.
• Repair, inspection, or installation tied to goods can follow goods-related rules.
• In-person personal services and location-specific events can follow performance-location rules.
• Telecommunications, transportation, litigation, and some computer-related services have their own tests.

Four simplified ordinary-service examples

These examples assume a registered supplier, an ordinary taxable service made in Canada, one relevant Canadian business address obtained in the normal course of business, and no specific rule. Change any of those facts and the result may change.

A client outside Canada is a different question

An American or other non-resident client is not merely an out-of-province client. First determine whether the supply is made in Canada and whether an export rule zero-rates it. CRA says certain services supplied to non-residents may be zero-rated, but conditions and exclusions apply.

Keep the contracting party, residence and registration evidence where relevant, service description, users or beneficiaries, Canadian establishments, property connections, and performance facts. A foreign address or foreign-currency payment alone does not prove a 0% result.

Preserve an invoice-rate workpaper

A defensible invoice record should show the conclusion path rather than only the percentage. Record the registration status used, taxability conclusion, service category, relevant client address or no-address facts, special-rule screen, place-of-supply result, current rate source, taxable consideration, and calculation date.

If a material fact is unresolved, hold the invoice for review or document a qualified conclusion. Do not silently default to the seller’s province, the billing address, or the highest rate as a substitute for the applicable rule.