Canada introduced its Goods and Services Tax (GST) in 1991 as part of a major federal tax reform. While Canada does not operate a traditional European-style VAT, its GST — and the Harmonized Sales Tax (HST) used in certain provinces — functions as a value-added consumption tax and is often described as VAT-like in practice.
Canada’s GST/HST regime is governed primarily by the Excise Tax Act, and it is administered by the Canada Revenue Agency (CRA). The CRA is responsible for issuing administrative guidance, managing GST/HST registrations and filings, and enforcing compliance with federal indirect tax rules. In participating provinces, the CRA also administers the provincial component of the HST.
Businesses carrying on taxable activities in Canada, whether resident or non-resident, are required to comply with GST/HST obligations. These obligations may include registering for GST/HST when required, charging the correct tax rate (GST, HST, or applicable provincial tax), issuing tax-compliant invoices, maintaining adequate records, and filing periodic GST/HST returns.
