How it works
Foreign software vendors that sell to Canadian businesses usually register for GST/HST and charge it at the rate of the province where the customer is. Quebec adds the QST, and British Columbia, Saskatchewan and Manitoba add a provincial sales tax on software, each with its own registration rules for out-of-province sellers.
A registered business can usually claim GST/HST back as an input tax credit, and in Quebec the QST as an input tax refund, so the real cost for many buyers is lower than the invoice. Provincial sales tax in BC, Saskatchewan and Manitoba is not recoverable that way. Ask your accountant how your company treats software.
| Province or territory | Tax on software | Combined rate |
|---|---|---|
| Ontario | HST | 13% |
| Quebec | GST + QST | 14.975% |
| British Columbia | GST + PST | 12% |
| Alberta | GST | 5% |
| Saskatchewan | GST + PST | 11% |
| Manitoba | GST + RST | 12% |
| Nova Scotia | HST (since April 1, 2025) | 14% |
| New Brunswick | HST | 15% |
| Newfoundland and Labrador | HST | 15% |
| Prince Edward Island | HST | 15% |
| Yukon, NWT, Nunavut | GST | 5% |
Source: Canada Revenue Agency GST/HST rates; Revenu Québec; provincial finance ministries (rates in force October 2026). Figures are for planning only and are not legal or tax advice.
Where this matters
- Data room for mergers and acquisitions in Canada
- Data room for selling a business in Canada
- Data room for startup fundraising in Canada
FAQ
Does a US data room vendor have to charge me GST or HST?
Most large foreign vendors that sell digital services to Canadian customers are registered and charge GST/HST. If an invoice shows no tax, your company may have to self-assess in some cases. Your accountant can confirm what applies to your business.
Can my company get the sales tax back?
A GST/HST registrant can generally claim input tax credits for tax paid on software used in its commercial activities, and Quebec registrants can claim QST input tax refunds. Provincial sales tax in BC, Saskatchewan and Manitoba is a cost.
Which province do I pick if the deal team is spread across Canada?
Tax generally follows where the customer is, usually the billing address of the company that buys the subscription. Pick that province.