Guides
How to Charge GST/HST on Equipment Rentals in Ontario and BC
Learn how to charge GST/HST on equipment rentals in Ontario and BC, including registration, invoice tax treatment, separate PST, and where to remit each tax.
What to take away
- GST/HST on equipment rentals is a federal tax administered by the Canada Revenue Agency under the Excise Tax Act.
- You must register once your worldwide taxable supplies exceed 30,000 dollars over four consecutive calendar quarters.
- Ontario applies one 13% HST with no separate PST on rentals, while British Columbia applies 5% GST plus 7% PST.
- Filing late or failing to collect can result in CRA assessing the uncollected tax, penalty and interest, and directors can be personally liable.
- A separately stated optional damage waiver may have its own tax treatment; read Equipment Rental Damage Waiver before bundling it into a taxable rental.
Who has jurisdiction over equipment rental taxes
The Canada Revenue Agency treats equipment rentals as taxable supplies in every province and territory. Federal GST/HST is imposed under the Excise Tax Act and administered by CRA. Provincial rules differ: British Columbia has the Provincial Sales Tax Act, Ontario has no separate retail sales tax on rentals.
Municipalities do not levy a general sales tax on equipment rentals. Private contracts can shift who bears the tax, but the rental business remains responsible for collecting and remitting what legislation requires.
What triggers GST/HST registration
A Canadian rental business is a small supplier if its worldwide taxable supplies are 30,000 dollars or less over four consecutive calendar quarters. Once the business exceeds that threshold, it must register for GST/HST immediately. Voluntary registration is allowed before reaching the threshold, which lets the business claim input tax credits on purchases. Non-resident suppliers renting equipment to Canadian customers may also need to register. Registration is triggered by taxable rental revenue, not by whether the equipment passes a safety inspection.
What to submit when you register
To register for a GST/HST account, complete Form RC1, Request for a Business Number, or use CRA's Business Registration Online service. You need your legal business name, trade name if different, business structure, owner or director details, and a short description of the rental activity. If you already have a business number for payroll or corporate tax, you can add a GST/HST account to that number. CRA usually issues the account number immediately online. Paper applications can take several weeks.
Provincial PST differences: BC versus Ontario
Provincial PST differences
GST/HST rate
- Ontario
- 13% HST
- British Columbia
- 5% GST plus 7% PST
- Alberta, Northwest Territories, Nunavut, Yukon
- 5% GST
- Saskatchewan
- 5% GST plus 6% PST
- Quebec
- 5% GST plus 9.975% QST
Provincial tax on equipment rentals
- Ontario
- No separate PST
- British Columbia
- 7% PST
- Alberta, Northwest Territories, Nunavut, Yukon
- No PST
- Saskatchewan
- 6% PST
- Quebec
- 9.975% QST
Ontario's 13% HST is one tax and includes the provincial component. Ontario customers pay no separate PST on equipment rentals.
British Columbia's 7% PST is reported and remitted separately to the BC Ministry of Finance. If rental equipment is delivered or made available in BC, BC PST applies, even for out-of-province customers. Private contracts cannot override these statutory rates.
GST/HST and PST by Province
Ontario
- GST/HST rate
- 13% HST
- Provincial tax
- No separate PST
- Combined rate
- 13%
- Remit to
- CRA
British Columbia
- GST/HST rate
- 5% GST
- Provincial tax
- 7% PST
- Combined rate
- 12%
- Remit to
- CRA + BC Ministry
Alberta
- GST/HST rate
- 5% GST
- Provincial tax
- No PST
- Combined rate
- 5%
- Remit to
- CRA
How to charge GST/HST on a rental invoice
How to charge GST/HST
- Confirm your GST/HST registration number is active before you issue any invoice.
- Determine the province where the equipment is delivered or made available, because that province sets the tax rate.
- Apply the correct GST/HST rate to the total rental charge, including mandatory fees and charges.
- Show the GST/HST registration number, tax rate, tax amount, and total on the invoice.
- Report the collected GST/HST on your return for the reporting period in which the supply occurs.
For the invoice fields CRA expects, read CRA GST HST rules.
Filing and remitting GST/HST and BC PST
For federal GST/HST, file the GST/HST return (GST34) for the reporting period CRA assigns. Calculate net tax as GST/HST collected or collectible minus eligible input tax credits, then file and pay by the due date shown for the account. CRA provides electronic filing through My Business Account.
File and pay BC PST through eTaxBC, using the filing period and due date assigned by the BC Ministry of Finance.
Charging GST/HST on a Rental Invoice
- Confirm GST/HST registration number is active
- Determine province where equipment is delivered
- Apply correct rate to total rental charge
- Show registration number, rate, tax, total
- Report collected GST/HST on your return
Calculating Ontario and BC rental taxes
For an Ontario taxable rental, multiply the taxable rental charge by 13% HST. In BC, calculate 5% GST and 7% PST separately; together, they add 12% to the taxable base. Add the applicable tax to the base charge, and list the two BC taxes separately on the invoice.
Ontario vs BC Rental Tax Example
Ontario
- GST/HST
- 13% HST
- PST
- None
- Combined rate
- 13%
- Remit to
- CRA
British Columbia
- GST/HST
- 5% GST
- PST
- 7% PST
- Combined rate
- 12%
- Remit to
- CRA + BC Ministry
The PST is remitted to the BC Ministry of Finance, while GST/HST goes to CRA. The sourcing rule is where the equipment is made available, not the customer's billing address.
A mandatory delivery fee or damage waiver added to the rental is generally included in the base for both GST/HST and PST. The provincial tax piece never merges with the federal piece in BC.
Use the actual taxable rental charge as the base; the final invoice total is the base plus the applicable tax amount or amounts.
What happens if you skip registration or collect wrong
If you fail to register and collect GST/HST when required, CRA can assess the tax you should have collected plus penalty and interest, and directors can be personally liable under the Excise Tax Act.
Penalties for Skipping Registration
Tax owed
Plus penalty and interest
Directors personally liable
Input tax credits denied
The CRA can also deny input tax credits for periods when you should have been registered. British Columbia can assess uncollected PST separately under its own provincial act. Penalties can be higher when a business collected tax but did not remit it. Using a clean equipment rental business quote with tax line items helps avoid missed PST or HST.
Correcting GST/HST return errors
If you find an error on a filed return, request an adjustment from CRA. Use the GST/HST return adjustment request online or by mail. Keep the original invoice and any provincial tax returns for at least six years. BC may require a separate amendment for PST.
Common errors include using the wrong province's rate, missing a mandatory fee, or charging HST on a BC rental. Correct the error before the next return cycle. CRA penalties are lower when you disclose voluntarily.
Tax records and yard paperwork
Tax reporting depends on the rental and its tax treatment, not on equipment inspection or lockout/tagout records. Keep invoices, GST/HST returns, and provincial PST returns organized so you can reconcile each tax separately.
Keep tax invoices in a separate file from inspection checklists. CRA auditors may ask for both. For a full yard inspection checklist, see OSHA Rules for Equipment Rental Yards.
