Place of Supply Rules: Which Province's Tax Rate Applies?
One of the most common GST/HST questions freelancers ask is: do I charge the tax rate for my province or my client's province? The answer is almost always your client's province — but the rules have nuances depending on whether you are delivering a service remotely, performing it on-site, or selling goods. This guide explains how Canada's place of supply rules work in plain language, with practical examples for every common freelance scenario.
Why Place of Supply Matters
Canada's HST rates range from 5% (Alberta, territories — GST only) to 15% (Nova Scotia, New Brunswick, Newfoundland, PEI). The difference between charging 5% and 15% on a $5,000 invoice is $500. Get the rate wrong and you will either undercharge your client (and be personally responsible for the shortfall when you remit) or overcharge them (and face a messy correction).
The place of supply rules exist because HST is a provincial tax that gets distributed back to the province where the consumption occurred. If you are an Alberta-based developer billing an Ontario client, the Ontario portion of HST belongs to Ontario — not Alberta. So you charge Ontario's 13% HST rate, collect it, and remit the whole amount to the CRA, which then distributes the provincial 8% portion to Ontario's government.
Your physical location as the supplier is largely irrelevant to the rate you charge. What matters is where the service is consumed — typically, where your client is located.
The General Rule: Where the Client Is Located
For most services provided by freelancers, the place of supply is the location of the recipient (your client) — specifically, the address to which the invoice is issued or where the client receives or uses the service. This is the default rule under Schedule IX of the Excise Tax Act.
In practical terms: look at your client's billing address. That province's rate applies. If your invoice is going to a Toronto office, charge Ontario 13% HST. If your invoice is going to a Calgary company, charge 5% GST.
This rule applies cleanly to most remote professional services:
- Web design and development delivered remotely
- Copywriting, editing, and content creation
- Graphic design and brand identity work
- Consulting and advisory services delivered by phone or video
- Software development and programming
- Marketing strategy and campaign management
- Bookkeeping and accounting (where permitted by provincial regulators)
- Virtual assistance and administrative services
Services Performed at a Specific Location
Certain services must be physically performed at a location, and the place of supply rule changes accordingly. For these services, the place of supply is where the work is physically performed, not where the client's head office is billed.
Services in this category include:
- Construction, renovation, and skilled trades work at a specific property
- In-person photography shoots (the shoot location determines the rate)
- Event coordination performed at a specific venue
- Personal training or fitness coaching delivered in person
- On-site IT support and installation (distinguishable from remote support)
Example: You are a photographer based in Vancouver (BC — 5% GST) and you travel to Halifax, Nova Scotia to photograph a wedding. The shoot takes place in Nova Scotia. The place of supply is Nova Scotia, and you charge 15% HST — not 5% GST. You then remit that 15% HST to the CRA, which distributes the provincial portion to Nova Scotia.
Remote and Digital Services: The Most Common Freelance Scenario
The vast majority of modern freelance work is delivered digitally — by email, cloud platform, or video call — without either party physically traveling anywhere. For these services, the place of supply is determined by the address of the client to which the invoice relates. This is typically:
- The address in the client's profile or contract (their billing address)
- The address the client's payment comes from, if no billing address is on file
- Any address obtained from the client in the normal course of business (email domain, phone area code — these are weak indicators; always ask for a billing address)
For most freelancers with a consistent roster of clients, you already know where your clients are located. The complexity mainly arises for new client engagements or for freelancers who market broadly across Canada without knowing exactly where each client is until the invoice stage.
Practical Examples: Cross-Province Billing
| Supplier Location | Client Location | Service Type | Rate to Charge | Why |
|---|---|---|---|---|
| Alberta | Ontario | Remote consulting | 13% HST | Client is in Ontario; Ontario rate applies |
| Ontario | Alberta | Remote copywriting | 5% GST | Client is in Alberta; Alberta has no HST |
| British Columbia | Nova Scotia | Remote design work | 15% HST | Client is in Nova Scotia; NS rate applies |
| Quebec | Ontario | Remote software development | 13% HST (GST portion) + QST if QST-registered | Ontario HST applies; QST only if supplier is QST-registered |
| Ontario | Manitoba | Remote marketing strategy | 5% GST | Manitoba is not an HST province; GST only applies to the service |
| Nova Scotia | Saskatchewan | Remote bookkeeping | 5% GST | Saskatchewan is not an HST province |
| Any Canadian province | United States | Any remote service | 0% (zero-rated) | Export of service to non-Canadian client |
| Any Canadian province | UK / EU / International | Any remote service | 0% (zero-rated) | Export of service to non-Canadian client |
When You Don't Know Where Your Client Is
Occasionally you may take on a new client without having confirmed their billing address — perhaps you agreed on the work via email without formal onboarding. Here is how to handle the uncertainty:
- Ask directly. Request a billing address before issuing the invoice. Most clients expect this and it creates no friction. "What address should I use for your invoice?" is a routine professional question.
- Use the address obtained in the normal course of business. If you have a signed contract with an address, an email signature with a city, or a company website listing a head office, use that.
- Use the most conservative approach. If you genuinely cannot determine the province, some tax professionals suggest defaulting to a higher rate (e.g., 15% HST) and then adjusting if the client provides a lower-rate address. In practice, it is better to simply ask than to guess. Overcharging a client by 10% HST and having to issue a credit is an awkward way to start a relationship.
Remitting the Right Amounts
Here is something that surprises many new freelancers: regardless of which province's tax rate you charge, you remit all collected GST/HST to the CRA as a single amount. You do not make separate remittances to each provincial government. The CRA is the single collection point for all HST revenues and handles the provincial distribution internally through the federal-provincial tax sharing agreements.
On your GST/HST return, you simply report:
- Total taxable revenues for the period
- Total GST/HST collected (combining all rates from all provinces)
- Total ITCs (GST/HST you paid on business expenses)
- Net remittance = tax collected minus ITCs
You do not itemize how much HST you collected from Ontario clients vs New Brunswick clients on your return. The CRA uses its own internal allocation formulas. Your obligation is simply to collect the correct rate and remit the total accurately.
International Clients: Zero-Rated Exports
If your client is located outside Canada — in the United States, the United Kingdom, Europe, Asia, or anywhere else — you charge 0% GST/HST. Services exported to non-Canadian recipients are "zero-rated" under Schedule VI of the Excise Tax Act. Zero-rated means taxable at 0% (as opposed to "exempt," which has different ITC implications).
The practical effect: you do not charge your US or international clients any Canadian tax. Your invoice shows 0% or simply omits a tax line entirely. You can still claim ITCs on your Canadian business expenses even though you are billing at 0% — this is one of the key advantages of zero-rating over exemption.
To document a zero-rated export properly:
- Note your client's country of residence on the invoice or in your records
- Keep the client's address and any correspondence confirming they are non-Canadian
- Label the tax line as "GST/HST: $0.00 (zero-rated export)" or simply omit the tax line with a note in the invoice description