CRA Place of Supply Rule

by Sarah

Sales Tax Errors

Sales Tax Errors

Have CRA's Place of Supply Rules recently changed?

It used to be that the Place of Supply was determined by the customer's province of residence. However, I recently purchased a product online - the vendor is in Ontario and I am in BC. Their site specifically stated that only GST would be charged for purchases destined anywhere in Canada outside of Ontario, but when the order was processed I was charged 13% HST instead of only 5% GST. When asked about the tax rate, the vendor replied that the rules had recently changed, however I can't find any information about any modifactions to the laws. And to dispel any questions about who initiated the shipping, the vendor offers it on their site, charges the customer for it and uses Canada Post as the delivery method.

I am an accountant by profession and am generally quite up to date on these things, but this is news to me.

Is anyone able to give any definitive answers as to whether or not this rule did in fact change, and if so, when the change was meant to be put to practice?


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Hi Sarah,

Well that is news to me too.

I do know that Amazon usually does not charge the correct amount of sales tax. They are located in Ontario and depending what part of their system you are using, they seem to charge everyone either no tax or 13% HST. They do not seem to be aware of Canada's "new" place of supply rules that came into effect on July 1, 2010.

When I go to CRA's place of supply rules page, they have a video on interprovincial supplies that is about 9 minutes long. It says the rate to charge, in general, is based on where the customer is located and then goes on to explain the rules for the different types of supplies: goods, real property, intangible property and services.

I think you were just overcharged on sales tax and the person you were speaking with didn't know what the heck they were talking about.

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