A taxable software subscription or digital product sold to a Canadian customer can attract GST/HST. Whether the seller must collect it depends on the supply, registration, customer and applicable platform rules. An online sale is not automatically exempt, and a foreign customer is not automatically zero-rated. CRA: electronic commerce.
SaaS, downloads and online courses: what did you sell?
Software access or a downloadable product may be a supply of intangible personal property; an instructor’s live service may instead be a service. Classification and contract rights matter. CRA notes that electronically supplied products can be services or intangible property. For courses, check whether a specific education exemption applies to that supplier and course—having a certificate or delivering a class online does not by itself settle the GST/HST treatment. CRA: exports of services and intangibles; CRA: type of supply.
For example, a normally registered Canadian seller supplies a taxable software subscription to an Ontario consumer. If the applicable place-of-supply rule places it in Ontario, a $100 subscription has $13 HST. Rights limited to particular provinces and special intangible-property rules can change the location analysis; do not use a customer address as a universal shortcut. CRA: place of supply.
Canadian and foreign buyers
For Canadian taxable supplies, the federal rates include 5% GST in non-participating provinces, 13% HST in Ontario, 14% in Nova Scotia and 15% in New Brunswick, Newfoundland and Labrador, and PEI. Provincial PST/RST and Quebec QST are separate questions. CRA rates.
For a non-resident buyer, determine whether the supply is a service or intangible and apply its specific export rule. CRA’s general intangible export rule includes a requirement that the non-resident recipient not be registered under the normal GST/HST regime; a right usable only in Canada is one exclusion. A non-resident individual physically in Canada when the intangible supply is made also needs special attention. For eligible internet sales, CRA describes online declarations of residence and registration supported by additional verification. CRA export memorandum.
Which registration threshold applies?
A Canadian business under the ordinary rules generally counts worldwide taxable supplies, including zero-rated supplies, together with its associates’ relevant supplies. Exceeding $30,000 in a single quarter and exceeding it over four consecutive quarters have different timing consequences. CRA registration.
A non-resident digital vendor that is not carrying on business in Canada and is not normally registered may instead be subject to the cross-border digital-economy measure. Its threshold generally considers more than $30,000 of applicable actual or reasonably expected non-zero-rated supplies to specified Canadian recipients over a 12-month period. Specified platform-deemed sales can be excluded from that vendor’s test. CRA digital threshold.
A simplified registrant collects tax on specified supplies to specified Canadian recipients and cannot claim ITCs under that account. Eligible businesses may apply for normal registration if CRA’s conditions are met; normal registrants may claim ITCs on qualifying commercial inputs, subject to the ordinary conditions. CRA account comparison.
Does a digital marketplace collect the tax?
Possibly. The applicable rule depends on the supplier’s status, the recipient, the platform and whether the platform is deemed to make the supply. Preserve the platform’s statements and reconcile customer charges and payouts with your filing records. A payment processor by itself does not answer who the tax supplier is. CRA: digital-economy threshold and platforms.
Is this Canada’s former digital services tax?
No. The GST/HST discussion above concerns consumption tax on particular supplies. The separate federal Digital Services Tax Act was repealed by legislation receiving Royal Assent March 26, 2026. CRA: digital services tax repealed.
Sources checked October 16, 2026: CRA rate, place-of-supply, export and digital-economy guidance linked above.