Harmonized Sales Tax (HST)

The Harmonized Sales Tax (HST) is a consumption tax used in Ontario (and several other provinces) after the Goods and Services Tax (GST) and the Provincial Sales Tax (PST) were combined into a single value added tax (VAT).

In Ontario the HST is 13%, a combination of the 8% GST rate plus the Provincial or Retail sales tax rate of 5%.

There are many nuances a small business charging HST needs to understand. Not all the provinces are involved with this tax and understanding what you need to know in Ontario as a small business owner is part of our job here at National Tax Service.

First and foremost is the fact that whether or not you charge this tax depends on the place of supply of the goods and services you sell. There are specific rules which dictate regulations whether the supply is made within or out of a province that subscribes to the HST.

There are particular pieces of information you need to have on your invoices to be in compliance with the HST and we’re here to help you stay within the legal bounds.

Many people want to know if their online businesses and the services they sell that way are subject to HST and the answer is usually yes. The basic rule is you charge the HST rate based on where the articles are being shipped to unless there is some exemption that is clearly laid out.

Remember, using our professional tax service can help you steer clear from the kind of trouble that can result in an audit.