Definition
PST (provincial sales tax) is a sales tax charged by some Canadian provinces on top of the 5 percent federal GST, in provinces that have not harmonized with it. British Columbia, Saskatchewan, and Manitoba levy their own PST or retail sales tax, and Quebec charges QST. Each requires separate registration and its own line on invoices.
Also called: Provincial sales tax, QST, Quebec sales tax, RST, Retail sales tax
PST in practice
Rates are 7 percent in British Columbia, 6 percent in Saskatchewan, 7 percent retail sales tax in Manitoba, and 9.975 percent QST in Quebec. Alberta and the three territories have no provincial sales tax, so only GST applies.
PST in British Columbia, Saskatchewan, and Manitoba is closer to a US-style retail sales tax: it applies to goods and a defined list of services, and businesses generally cannot claim credits for PST paid on their own purchases. QST works like GST, with input tax refunds.
Out-of-province sellers may have to register and collect PST once they sell enough into a province, including for software and digital services. Check each province's rules before invoicing clients there.
Example
A Vancouver IT reseller sells $1,000 of software licences to a local client. The invoice shows $50 GST and $70 BC PST as separate lines, for a total of $1,120.
Frequently Asked Questions
Is PST charged on the price including GST?
No. In every province that has one, PST or QST is calculated on the price before GST, and the two taxes are shown on separate lines.
Do I charge PST to clients in other provinces?
Only if that province's rules require you to register there. Otherwise you charge GST, or HST if the client is in a participating province.
Related terms
- GST GST (goods and services tax) is a broad consumption tax applied to most goods and services, functioning like VAT.
- HST HST (harmonized sales tax) is a single sales tax that combines the 5 percent federal GST with a provincial sales tax in Ontario and the four Atlantic provinces.
- Sales tax Sales tax is a consumption tax added to the price of goods and some services at the point of sale, collected by the seller and remitted to the state or local government.
- Business number (BN) A business number (BN) is the nine-digit number the Canada Revenue Agency assigns to a business to identify it for federal tax programs.
- Small supplier A small supplier is a Canadian business whose worldwide taxable sales, together with those of associated businesses, are $30,000 or less over four consecutive calendar quarters.
- Tax exempt A tax-exempt sale is one on which no sales tax, VAT, or GST is charged because the buyer, the product, or the transaction qualifies for an exemption.
This page is for general information only and is not legal, tax, or financial advice. Rules change and vary by location, so consult a qualified lawyer or accountant about your situation.