Nigel Smith, Author at - Page 4 of 6

In the provinces of Ontario, Nova Scotia, New Brunswick and Newfoundland & Labrador, the administration of GST and PST has been combined and the result referred to as Harmonized Sales Tax (“HST”). The allocation of provincial sales tax among these provinces are governed by “place of supply rules” contained in the federal legislation.

According to the place of supply rules, the province with jurisdiction is generally the one in which the supply occurs. For example:

  • if the goods supplied are tangible personal property then the relevant province is generally the one in which the goods are delivered or made available to the recipient;
  • if the supply is of real estate then the relevant province is generally the one in which that real estate is located;
  • if the supply is of intangible personal property, jurisdiction will depend on a number of factors, including the place in which the property can be used and the location of the purchaser;
  • different intangible properties are subject to different rules; and
  • when services are supplied, the relevant province is generally determined according to the home or business address of the purchaser, although specific rules apply for certain types of services.

The place of supply rules are extensive and the above examples are general and for illustrative purposes only.

When property and services are brought into an HST province from another province (whether or not such other province is also an HST province) or from outside Canada for consumption, use or supply in that HST province, the supplier is required to self-assess since no actual purchase and sale occurs.


‹ IV. When do I become subject to Canada’s provincial sales taxes? up

B. Non-HST provinces—Alberta, Manitoba, Prince Edward Island, Quebec and Saskatchewan ›


The allocation of income among provinces for provincial income tax purposes is governed by the provinces themselves. The rules differ among provinces and can be very contextual. In general, however, when a taxpayer maintains permanent establishments in more than one province, income is allocated according to the proportion of gross-income earned and salaries and wages paid in those provinces. If gross revenue in a province is nil then income is allocated solely according to salaries and wages. Conversely, if salaries and wages are nil then income is allocated solely according to gross revenue.


 ‹ 10. Saskatchewan up

III. When do I become subject to Canada’s federal sales tax (GST)? ›


Saskatchewan defines a “permanent establishment” (by reference to Federal regulations) as a fixed place of business of the corporation. This specifically includes an office, a branch, a mine, an oil well, a farm, timber land, a factory, a workshop or a warehouse. The following series of rules is provided:

  • where the corporation does not have any fixed place of business, “permanent establishment” means the principal place in which the corporation’s business is conducted;
  • where a corporation carries on business through an employee or agent established in a particular place, who has general authority to contract for his employer or principal or who has a stock of merchandise owned by his employer or principal from which he regularly fills orders which he receives, the corporation shall be deemed to have a permanent establishment in that place;
  • an insurance corporation is deemed to have a permanent establishment in each province and country in which the corporation is registered or licensed to do business;
  • where a corporation, otherwise having a permanent establishment in Canada, owns land in a province, such land shall be deemed to be a permanent establishment;
  • where a corporation uses substantial machinery or equipment in a particular place at any time in a taxation year, it shall be deemed to have a permanent establishment in that place;
  • if, under the above rules, a corporation would not have a permanent establishment, the corporation is deemed to have a permanent establishment at the place designated in its incorporating documents or bylaws as its head office or registered office;
  • the fact that a corporation had business dealings through a commission agent, broker or other independent agent or maintains an office solely for the purchase of merchandise shall not of itself be held to mean that the corporation has a permanent establishment; and
  • the fact that a corporation has a subsidiary controlled corporation in a place or a subsidiary controlled corporation engaged in trade or business in a place shall not of itself be held to mean that the corporation is operating a permanent establishment in that place.

 ‹ 9. Quebec up

B. Interprovincial allocations ›


Quebec refers to “establishments” instead of “permanent establishments”. Quebec defines an “establishment” as a fixed place where the taxpayer carries on business or, if there is no such place, the taxpayer’s principal place of business. This specifically includes an office, a branch, a mine, an oil or gas well, a farm, timber land, a factory, a warehouse or a workshop. The following series of rules is provided:

  • a corporation has an establishment in each province in which an immovable owned by the corporation and used principally for the purpose of earning or producing gross revenue that is rent is situated;
  • where a taxpayer carries on business through an employee, agent or mandatary established in a particular place, who has general authority to contract for the employer or mandator or who has a stock of merchandise owned by such employer or mandator from which the employee, agent or mandatary regularly fills orders which the employee, agent or mandatary receives, the taxpayer is deemed to have an establishment in that place;
  • a taxpayer is not deemed to have an establishment for the sole reason that the taxpayer has business dealings through a commission agent, a broker or other independent agent or maintains an office or warehouse solely for the purchase of merchandise; similarly, the taxpayer is not deemed to have an establishment in a place solely because of the taxpayer’s control over a subsidiary carrying on business in that place;
  • a corporation that has an establishment in Canada and is the owner of land in a province is deemed to have with respect to such land an establishment in that province;
  • a taxpayer using at a particular place substantial machinery or material at a particular time in a taxation year is deemed to have an establishment at that place;
  • an insurance corporation is deemed to have an establishment at each place where it is registered or holds a permit to carry on business;
  • if, under the above rules, a corporation would not have an establishment, the corporation is deemed to have an establishment at the place designated in its articles as its head office;
  • where, in a taxation year, a corporation not resident in Canada operates a mine, produces, processes, preserves, packs or builds goods or products in whole or in part, or produces or presents a public show, it is deemed to have an establishment at the place, in Canada, where it carries on one or the other of these activities; and
  • the above two rules do not apply in respect of a taxpayer’s activities relating to a business of the taxpayer that consists in operating a sports team that plays one or more of its matches or games, or that takes part in one or more competitions, outside Quebec, or to a sports club if, in connection with its activities, one of its members plays a match or game, or takes part in a competition, outside Québec.

 ‹ 8. Prince Edward Island up

10. Saskatchewan ›


Prince Edward Island defines a “permanent establishment” (by reference to Federal regulations) as a fixed place of business of the corporation. This specifically includes an office, a branch, a mine, an oil well, a farm, timber land, a factory, a workshop or a warehouse. The following series of rules is provided:

  • where the corporation does not have any fixed place of business, “permanent establishment” means the principal place in which the corporation’s business is conducted;
  • where a corporation carries on business through an employee or agent established in a particular place, who has general authority to contract for his employer or principal or who has a stock of merchandise owned by his employer or principal from which he regularly fills orders which he receives, the corporation shall be deemed to have a permanent establishment in that place;
  • an insurance corporation is deemed to have a permanent establishment in each province and country in which the corporation is registered or licensed to do business;
  • where a corporation, otherwise having a permanent establishment in Canada, owns land in a province, such land shall be deemed to be a permanent establishment;
  • where a corporation uses substantial machinery or equipment in a particular place at any time in a taxation year, it shall be deemed to have a permanent establishment in that place;
  • if, under the above rules, a corporation would not have a permanent establishment, the corporation is deemed to have a permanent establishment at the place designated in its incorporating documents or bylaws as its head office or registered office;
  • the fact that a corporation had business dealings through a commission agent, broker or other independent agent or maintains an office solely for the purchase of merchandise shall not of itself be held to mean that the corporation has a permanent establishment; and
  • the fact that a corporation has a subsidiary controlled corporation in a place or a subsidiary controlled corporation engaged in trade or business in a place shall not of itself be held to mean that the corporation is operating a permanent establishment in that place.

 ‹ 7. Ontario up

9. Quebec ›


Ontario does not define “permanent establishment” but instead simply states that it includes branches, mines, oil wells, farms, timberlands, factories, workshops, warehouses, offices, agencies and other fixed places of business. The following series of rules is then provided:

  • where a corporation carries on business through an employee or agent who has general authority to contract for the corporation or who has a stock of merchandise owned by the corporation from which the employee or agent regularly fills orders which the employee or agent receives, such employee or agent shall be deemed to operate a permanent establishment of the corporation;
  • the fact that a corporation has business dealings through a commission agent, broker or other independent agent shall not of itself mean that the corporation has a permanent establishment;
  • the fact that a corporation has a subsidiary controlled corporation in a place or a subsidiary controlled corporation engaged in trade or business in a place shall not of itself mean that the corporation is operating a permanent establishment in that place;
  • an insurance corporation is deemed to have a permanent establishment in each jurisdiction in which the corporation is registered or licensed to do business;
  • the fact that a corporation maintains an office solely for the purchase of merchandise shall not of itself mean that the corporation has a permanent establishment in that office;
  • where a corporation otherwise having a permanent establishment in Canada owns land in a province or territory of Canada, such land is a permanent establishment;
  • the fact that a non-resident corporation in a taxation year produced, grew, mined, created, manufactured, fabricated, improved, packed, preserved or constructed in whole or in part anything in Canada, whether or not the corporation exported that thing without selling it prior to exportation, shall of itself, mean that the corporation maintained a permanent establishment at any place where the corporation did any of those things in the taxation year;
  • the use of substantial machinery or equipment in a particular place at any time in a taxation year of a corporation constitutes a permanent establishment of such corporation in that place for the taxation year;
  • where a corporation has no fixed place of business, it has a permanent establishment in the principal place in which the corporation’s business is conducted; and
  • where a corporation does not otherwise have a permanent establishment in Canada, it has a permanent establishment in the place designated in its charter or by-laws as being its head office or registered office.

 ‹ 6. Nova Scotia up

8. Prince Edward Island ›


Nova Scotia defines a “permanent establishment” (by reference to Federal regulations) as a fixed place of business of the corporation. This specifically includes an office, a branch, a mine, an oil well, a farm, timber land, a factory, a workshop or a warehouse. The following series of rules is provided:

  • where the corporation does not have any fixed place of business, “permanent establishment” means the principal place in which the corporation’s business is conducted;
  • where a corporation carries on business through an employee or agent established in a particular place, who has general authority to contract for his employer or principal or who has a stock of merchandise owned by his employer or principal from which he regularly fills orders which he receives, the corporation shall be deemed to have a permanent establishment in that place;
  • an insurance corporation is deemed to have a permanent establishment in each province and country in which the corporation is registered or licensed to do business;
  • where a corporation, otherwise having a permanent establishment in Canada, owns land in a province, such land shall be deemed to be a permanent establishment;
  • where a corporation uses substantial machinery or equipment in a particular place at any time in a taxation year, it shall be deemed to have a permanent establishment in that place;
  • if, under the above rules, a corporation would not have a permanent establishment, the corporation is deemed to have a permanent establishment at the place designated in its incorporating documents or bylaws as its head office or registered office;
  • the fact that a corporation had business dealings through a commission agent, broker or other independent agent or maintains an office solely for the purchase of merchandise shall not of itself be held to mean that the corporation has a permanent establishment; and
  • the fact that a corporation has a subsidiary controlled corporation in a place or a subsidiary controlled corporation engaged in trade or business in a place shall not of itself be held to mean that the corporation is operating a permanent establishment in that place.

 ‹ 5. Newfoundland & Labrador  up

7. Ontario ›


Newfoundland & Labrador defines a “permanent establishment” (by reference to Federal regulations) as a fixed place of business of the corporation. This specifically includes an office, a branch, a mine, an oil well, a farm, timber land, a factory, a workshop or a warehouse. The following series of rules is provided:

  • where the corporation does not have any fixed place of business, “permanent establishment” means the principal place in which the corporation’s business is conducted;
  • where a corporation carries on business through an employee or agent established in a particular place, who has general authority to contract for his employer or principal or who has a stock of merchandise owned by his employer or principal from which he regularly fills orders which he receives, the corporation shall be deemed to have a permanent establishment in that place;
  • an insurance corporation is deemed to have a permanent establishment in each province and country in which the corporation is registered or licensed to do business;
  • where a corporation, otherwise having a permanent establishment in Canada, owns land in a province, such land shall be deemed to be a permanent establishment;
  • where a corporation uses substantial machinery or equipment in a particular place at any time in a taxation year, it shall be deemed to have a permanent establishment in that place;
  • if, under the above rules, a corporation would not have a permanent establishment, the corporation is deemed to have a permanent establishment at the place designated in its incorporating documents or bylaws as its head office or registered office;
  • the fact that a corporation had business dealings through a commission agent, broker or other independent agent or maintains an office solely for the purchase of merchandise shall not of itself be held to mean that the corporation has a permanent establishment; and
  • the fact that a corporation has a subsidiary controlled corporation in a place or a subsidiary controlled corporation engaged in trade or business in a place shall not of itself be held to mean that the corporation is operating a permanent establishment in that place.

 ‹ 4. New Brunswick up

6. Nova Scotia ›


New Brunswick defines a “permanent establishment” (by reference to Federal regulations) as a fixed place of business of the corporation. This specifically includes an office, a branch, a mine, an oil well, a farm, timber land, a factory, a workshop or a warehouse. The following series of rules is provided:

  • where the corporation does not have any fixed place of business, “permanent establishment” means the principal place in which the corporation’s business is conducted;
  • where a corporation carries on business through an employee or agent established in a particular place, who has general authority to contract for his employer or principal or who has a stock of merchandise owned by his employer or principal from which he regularly fills orders which he receives, the corporation shall be deemed to have a permanent establishment in that place;
  • an insurance corporation is deemed to have a permanent establishment in each province and country in which the corporation is registered or licensed to do business;
  • where a corporation, otherwise having a permanent establishment in Canada, owns land in a province, such land shall be deemed to be a permanent establishment;
  • where a corporation uses substantial machinery or equipment in a particular place at any time in a taxation year, it shall be deemed to have a permanent establishment in that place;
  • if, under the above rules, a corporation would not have a permanent establishment, the corporation is deemed to have a permanent establishment at the place designated in its incorporating documents or bylaws as its head office or registered office;
  • the fact that a corporation had business dealings through a commission agent, broker or other independent agent or maintains an office solely for the purchase of merchandise shall not of itself be held to mean that the corporation has a permanent establishment; and
  • the fact that a corporation has a subsidiary controlled corporation in a place or a subsidiary controlled corporation engaged in trade or business in a place shall not of itself be held to mean that the corporation is operating a permanent establishment in that place.

 ‹ 3. Manitoba up

5. Newfoundland & Labrador ›


Manitoba defines a “permanent establishment” (by reference to Federal regulations) as a fixed place of business of the corporation. This specifically includes an office, a branch, a mine, an oil well, a farm, timber land, a factory, a workshop or a warehouse. The following series of rules is provided:

  • where the corporation does not have a fixed place of business, “permanent establishment” means the principal place in which the corporation’s business is conducted;
  • where a corporation carries on business through an employee or agent established in a particular place, who has general authority to contract for his employer or principal or who has a stock of merchandise owned by his employer or principal from which he regularly fills orders which he receives, the corporation shall be deemed to have a permanent establishment in that place;
  • an insurance corporation is deemed to have a permanent establishment in each province and country in which the corporation is registered or licensed to do business;
  • where a corporation, otherwise having a permanent establishment in Canada, owns land in a province, such land shall be deemed to be a permanent establishment;
  • where a corporation uses substantial machinery or equipment in a particular place at any time in a taxation year, it shall be deemed to have a permanent establishment in that place;
  • if, under the above rules, a corporation would not have a permanent establishment, the corporation is deemed to have a permanent establishment at the place designated in its incorporating documents or bylaws as its head office or registered office;
  • the fact that a corporation had business dealings through a commission agent, broker or other independent agent or maintains an office solely for the purchase of merchandise shall not of itself be held to mean that the corporation has a permanent establishment; and
  • the fact that a corporation has a subsidiary controlled corporation in a place or a subsidiary controlled corporation engaged in trade or business in a place shall not of itself be held to mean that the corporation is operating a permanent establishment in that place.

 ‹ 2. British Columbia  up

4. New Brunswick ›



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