The short answer
A freight service is usually zero-rated when it moves goods across the Canadian border. You charge GST/HST at 0%. You can usually still claim input tax credits, which means you get back the GST/HST you paid on fuel, repairs and other costs.
| Move | GST/HST | Condition |
|---|---|---|
| Canada to a place outside Canada | 0% | The freight charge is $5 or more |
| Outside Canada to a place in Canada | 0% | None for a direct move |
| Outside Canada to outside Canada, through Canada | 0% | Includes in-transit moves |
| Canada to Canada, routed through the US | Taxable | It's a domestic move |
| Canadian leg of an export | 0% | Shipper's declaration, and $5 or more |
| Canadian leg of an import | 0% | You keep documents showing a continuous movement |
Zero-rated or exempt?
The two are easy to confuse, but they aren't the same.
- Zero-rated: taxable at 0%. You charge no tax, and you can usually claim input tax credits.
- Exempt: no GST/HST applies, and you can't claim input tax credits on the related costs.
Cross-border freight is zero-rated. That's why you should keep your fuel and repair receipts, even for loads with no tax on the invoice.
The Canadian leg of an export
Say you haul a container from a plant in Alberta to the port of Vancouver under its own bill of lading. It then leaves by ship under a second bill of lading. Your move is between two places in Canada, so it would normally be taxed. It's zero-rated if all of these are true:
- The goods are exported, and your service is part of a continuous outbound movement.
- The charge is $5 or more.
- The shipper gives you a written declaration, on the bill of lading or in a separate document.
CRA gives this wording for the declaration:
The property is being shipped for export and the freight transportation service to be supplied by the carrier is part of a continuous outbound freight movement in respect of the property (within the meaning of subsection 1(1) of Part VII of Schedule VI to the Excise Tax Act).
Our bill of lading template already includes it, in English and French.
Without the declaration, you charge tax based on the destination. The same applies if you get a declaration but the goods aren't exported. In that case, you don't have to collect the tax if you didn't know, and couldn't reasonably have known, that the goods were staying in Canada.
The Canadian leg of an import
A carrier can zero-rate a delivery inside Canada after the goods arrive from abroad. The service must be part of a continuous movement from outside Canada to a destination the shipper named. Keep proof, such as a copy of the original bill of lading or air waybill. CRA's example: a shipment from England is cleared in Calgary, then trucked to Red Deer under a separate bill of lading.
Quebec
The QST rules work in a similar way, with one difference: they look at the Quebec border as well as the Canadian one. If you carry goods between two places in Quebec on their way out of the country, Revenu Québec asks for form VD-197-V from the shipper. See our guide to QST on freight.
Check your own route
The freight GST/HST calculator covers direct moves and the Canadian legs of exports and imports. It also tells you which document each one needs.
Sources
- CRA: GST/HST information for freight carriers
- CRA: GST/HST Memorandum 28-2, paragraphs 62 to 71
- Revenu Québec: Domestic Outbound Services
This guide doesn't replace the law or professional advice, and rules change. Check the sources above before you rely on it.