Sales Tax on Digital Products in Canada: Province by Province Guide
Most digital products are fully taxable — but the rate and who collects it varies by province.
The short answer
GST/HST applies everywhere — four provinces add more on top
Almost all digital products sold to Canadian customers attract federal GST or HST once you exceed the $30,000 small supplier threshold — ebooks, courses, downloads, SaaS, templates, stock photos, and software licences are all taxable as intangible personal property. On top of that, four provinces charge their own tax: BC (7% PST), Saskatchewan (6% PST), Manitoba (7% RST), and Quebec (9.975% QST). HST provinces like Ontario collect the provincial portion inside HST — no extra layer.
The rate you charge depends on your customer’s address, not yours. For digital products, the CRA’s place-of-supply rule points to the recipient’s address you have on file. If you have no address, the fallback is the highest applicable rate among the provinces where the product can be used — which for most unrestricted digital products means you charge the highest GST/HST rate in Canada until you obtain an address.
Product by product
What's taxable, zero-rated, or exempt
The CRA classifies every supply as taxable (GST/HST applies), zero-rated (GST/HST at 0% — seller can still claim input tax credits), or exempt (no tax, no credits). For digital products, the vast majority are taxable. The main exceptions are exports (zero-rated) and a narrow set of educational services from accredited institutions.
Common digital products — GST/HST taxability
| Product type | Status | Provincial notes |
|---|---|---|
| SaaS / cloud software subscriptions | Taxable | BC PST 7%, SK PST 6%, MB RST 7%, QC QST 9.975% all apply. |
| Downloadable software (licence) | Taxable | Same provincial treatment as SaaS — BC, SK, MB, QC all tax it. |
| Ebooks / digital books | Taxable | Taxable for GST/HST. Note: printed books qualify for Ontario's point-of-sale HST rebate, but ebooks do not. |
| Online courses (pre-recorded) | Taxable | Generally taxable. Exception: courses by accredited vocational schools leading to a certificate may be exempt — verify with CRA. |
| Stock photos / digital art / fonts | Taxable | Digital licences are intangible personal property — taxable. Provincial rules vary; BC PST applies. |
| Music / audio downloads | Taxable | Taxable. Not the same as zero-rated printed music. |
| Digital templates / Notion / Figma files | Taxable | Treated as intangible personal property or software. Taxable for GST/HST and potentially PST. |
| Prescription drug info / medical databases | Varies | Depends on the nature of the supply. Consult CRA guidance on healthcare exemptions. |
| Newsletter / content subscription | Taxable | Electronic subscriptions are generally taxable as intangible personal property. |
| Exported digital products (buyer outside Canada) | Zero-rated | Exports are zero-rated. No GST/HST charged, but seller can still claim ITCs. |
Digital product tax by province
| Province | GST / HST | Provincial tax? | Total |
|---|---|---|---|
| Ontario | 13% HST | No | 13% |
| British Columbia | 5% GST | Yes — 7% PST | 12% |
| Quebec | 5% GST | Yes — 9.975% QST | 14.975% |
| Saskatchewan | 5% GST | Yes — 6% PST | 11% |
| Manitoba | 5% GST | Yes — 7% RST | 12% |
| Alberta | 5% GST | No | 5% |
| New Brunswick | 15% HST | No | 15% |
| Nova Scotia | 14% HST | No | 14% |
| Newfoundland & Labrador | 15% HST | No | 15% |
| Prince Edward Island | 15% HST | No | 15% |
| YT / NT / NU | 5% GST | No | 5% |
The “no address” fallback rule — and why it matters
For digital products, CRA Technical Bulletin B-103 says: if you have no customer address on file and the product can be used across Canada without restriction, you must charge the highest applicable GST/HST rate among the provinces where it can be used.
For an unrestricted digital product available to all Canadian provinces, that currently means 15% HST (the rate in NB, NL, and PE). This is a meaningful penalty for not collecting addresses — always ask for a billing address.
This rule differs from services, where the fallback is where you perform the work. The digital product fallback is explicitly “highest rate” — not your own province’s rate.
What a $49 digital product sale looks like by province
Ontario customer — $49 ebook
HST only. One remittance to CRA.
BC customer — $49 software download
Two taxes, two remittances. PST to BC Ministry of Finance.
Quebec customer — $49 SaaS subscription
QST on base price ($49), not on $51.45. GST to CRA, QST to Revenu Québec.
No address on file — $49 unrestricted download
B-103 fallback: charge highest rate when no customer address is on file for an unrestricted digital product.
Free tool
Calculate your exact rate
Use our free Canadian sales tax calculator to get the answer for your specific situation — seller province, buyer province, and product type — with government sources cited.
Use the free calculatorRegistration requirements for digital sellers
CRA (GST/HST)
Required once your taxable revenues exceed $30,000 over four consecutive quarters. Voluntary registration is allowed before that. One registration covers all HST provinces.
BC Ministry of Finance (PST)
Required if you sell taxable digital products (SaaS, software, APIs) to BC customers and are actively soliciting BC sales. No minimum revenue threshold for out-of-province sellers.
Saskatchewan Finance (PST)
Required if you sell taxable software/SaaS to SK customers. No minimum threshold for non-resident vendors.
Manitoba Finance (RST)
Required if you solicit sales in Manitoba — including through a public website. RST applies to cloud software sold to MB customers.
Revenu Québec (QST)
Separate registration required from the CRA. Required once taxable supplies to Quebec customers exceed $30,000. QST applies to digital products including SaaS.
What most people get wrong
Common digital product tax mistakes
Thinking digital products aren't taxable because they're "not physical"
This is the most common starting assumption, and it's wrong. The CRA classifies digital products — downloads, SaaS, licences, ebooks, templates — as "intangible personal property," which is a fully taxable category. The fact that nothing ships doesn't make it exempt. Only specific categories like basic groceries and most healthcare are exempt; digital products don't qualify.
Not collecting the customer's address and hitting the highest-rate fallback
For digital products, if you have no address for the customer and the product is available across Canada, B-103 requires you to charge the highest applicable rate — currently 15% HST. That's not a theoretical edge case; it's the rule that applies to every anonymous sale. If your checkout doesn't collect a billing address, every unattributed sale should technically be charged at 15%. Add an address field.
Only charging GST/HST and ignoring BC/SK/MB/QC provincial tax
Charging 5% GST to a BC customer on a software subscription when you should be charging 12% (5% GST + 7% PST) means you're collecting 7% less than required. Over $10,000 in BC digital sales, that's $700 in unremitted PST. The four PST provinces each require separate registration and separate remittance — your CRA number doesn't cover any of them.
Treating ebooks and printed books the same for tax purposes
Printed books qualify for Ontario's 8% point-of-sale HST rebate — buyers effectively pay 5% GST only. Ebooks do not qualify for the rebate. If you sell both formats, they have different effective tax rates in Ontario. Similarly, physical music recordings have different treatment from digital music downloads. The format matters.
Assuming exports to foreign customers are taxable
Digital products sold to customers outside Canada are zero-rated exports — you charge 0% GST/HST. Zero-rated is not the same as exempt: you can still claim input tax credits (ITCs) on business expenses. If you sell internationally, don't charge Canadian GST/HST to non-Canadian customers — but do track the revenue, because zero-rated supplies count toward the $30,000 registration threshold.
Applying QST on top of GST instead of on the base price
For Quebec customers, QST (9.975%) is calculated on the selling price before GST — not on the GST-inclusive price. On a $49 sale: QST = $49 × 9.975% = $4.89. Not $51.45 × 9.975% = $5.13. The correct method is confirmed on the Revenu Québec website. Charging QST on the GST-inclusive amount overcharges your Quebec customers by about 50 cents per $100.
Summary
Key takeaways
Digital products (SaaS, downloads, ebooks, templates, licences) are taxable as intangible personal property — not exempt because they're not physical.
GST/HST applies based on the customer's province (address on file). The rate follows the customer, not the seller.
BC (7% PST), SK (6% PST), MB (7% RST), and QC (9.975% QST) add their own tax on top of GST.
HST provinces (ON, NB, NL, NS, PE) don't add a separate digital product tax — HST is the only line.
If you have no customer address and the product is unrestricted, charge the highest rate in Canada (currently 15%).
Exports to non-Canadian customers are zero-rated — charge 0% GST/HST, but you can still claim ITCs.
Each PST province and Quebec requires a separate registration beyond your CRA GST/HST number.
QST is calculated on the base price before GST — not on the GST-inclusive amount.
Zero-rated supplies (including exports) count toward the $30,000 GST/HST registration threshold.
Free tool
Calculate your exact rate
Use our free Canadian sales tax calculator to get the answer for your specific situation — seller province, buyer province, and product type — with government sources cited.
Use the free calculatorGovernment sources
Sources
Every taxability classification and rate in this article is sourced from official government publications. Digital product tax rules are evolving in some provinces — verify current rules directly before invoicing.
- Type of supply — taxable, zero-rated, and exempt (filterable table)
Canada Revenue Agency
- Place of supply — practical guide
Canada Revenue Agency
- PST Bulletin 105 — Software (SaaS, IaaS, APIs, cloud)
BC Ministry of Finance
- Provincial Sales Tax (SK PST)
Saskatchewan Finance
- Retail Sales Tax (MB RST)
Manitoba Finance
- QST — basic rules for applying GST/HST and QST
Revenu Québec
Keep reading
Related guides
SaaS Sales Tax in Canada: Which Provinces Charge PST on Software?
Deep dive into SaaS-specific rules — BC Bulletin PST 105, the "highest rate" fallback when you have no customer address, and registration requirements by province.
BC PST on Services: What's Taxable and What's Not
BC taxes more digital and service categories than any other PST province. Here's the precise line between taxable and exempt under BC law.
Place of Supply Rules in Canada: How to Determine Which Tax Applies
The full legal framework — how the CRA determines which province's rate applies to goods, services, and digital products.
Disclaimer
TaxMapCA provides tax information, not tax advice. This article is for general informational purposes only and does not constitute legal or accounting advice. Digital product tax rules are evolving — always verify current rules against the government sources linked above before invoicing or filing. TaxMapCA is not affiliated with or endorsed by the Canada Revenue Agency, Revenu Québec, the BC Ministry of Finance, or any other tax authority. For complex situations, consult a qualified CPA or tax professional.