Guides
GST HST PST for Coffee Shops in Canada: A Province-by-Province Guide
GST HST PST for coffee shops in Canada: provincial rates, input tax credits, and CRA penalties for skipping compliance, plus label and record rules.
What to take away
- GST/HST applies to coffee drinks and prepared food sold for immediate consumption; rates vary from 5% to 15% by province or territory.
- Provincial sales taxes add 6% to 9.975% in British Columbia, Manitoba, Saskatchewan, and Quebec.
- Input tax credits recover GST/HST paid on business purchases, but PST and RST are generally not recoverable in the same way.
- Skipping GST/HST registration or failing to remit can lead to CRA assessments for uncollected tax plus penalties and daily compound interest.
GST/HST rates and place of supply
Coffee shop taxes in Canada follow federal and provincial rules. CRA's GST/HST rate and place-of-supply guidance lists the current rates for each province and territory. CRA administers GST/HST. Provincial revenue agencies administer PST, RST, and QST.
Coffee shops charge GST or HST on taxable supplies of coffee, tea, and prepared food sold for immediate consumption. Coffee beans sold whole or ground are zero-rated basic groceries, but a brewed cup or a prepared sandwich is taxable. The place of supply for sit-down service is the province where the food is served. For takeout, the place of supply is the province where the customer receives the food. GST/HST also applies to employee meals and taxable benefits. For rules on probation periods and tip handling, read hiring in Canada.
Provincial and territorial rates
The table below shows the combined federal and provincial tax rates for taxable coffee shop sales. Use the column for the province where the taxable supply is made.
Tax rates by province
Province
- Alberta
- 5%
- British Columbia
- 5%
- Ontario
- 13% HST
- Quebec
- 5%
- Saskatchewan
- 5%
- Nova Scotia
- 15% HST
GST/HST
- Alberta
- none
- British Columbia
- 7% PST
- Ontario
- none
- Quebec
- 9.975% QST
- Saskatchewan
- 6% PST
- Nova Scotia
- none
PST/RST/QST
- Alberta
- 5%
- British Columbia
- 12%
- Ontario
- 13%
- Quebec
- 14.975%
- Saskatchewan
- 11%
- Nova Scotia
- 15%
Total
- Alberta
- British Columbia
- Ontario
- Quebec
- Saskatchewan
- Nova Scotia
| Province or territory | GST/HST rate | PST/RST/QST rate | Total tax on taxable sales |
|---|---|---|---|
| Alberta | 5% | none | 5% |
| British Columbia | 5% | 7% PST | 12% |
| Manitoba | 5% | 7% RST | 12% |
| New Brunswick | 15% HST | none | 15% |
| Newfoundland and Labrador | 15% HST | none | 15% |
| Northwest Territories | 5% | none | 5% |
| Nova Scotia | 15% HST | none | 15% |
| Nunavut | 5% | none | 5% |
| Ontario | 13% HST | none | 13% |
| Prince Edward Island | 15% HST | none | 15% |
| Quebec | 5% | 9.975% QST | 14.975% |
| Saskatchewan | 5% | 6% PST | 11% |
| Yukon | 5% | none | 5% |
The BC PST information page confirms the 7% rate for coffee shop sales. Quebec's QST applies on the same taxable base as GST. Quebec QST registrants can claim input tax refunds for QST paid on business inputs, but the mechanics differ from GST/HST ITCs. Menu engineering helps you decide which taxable drinks to promote after adding the correct rate.
Input tax credits for coffee shops
CRA's GST/HST for businesses overview states that a person whose worldwide taxable supplies exceed thirty thousand dollars over four consecutive calendar quarters must register. Coffee shops below that threshold may register voluntarily to claim input tax credits. Input tax credits cover GST/HST paid on coffee beans, milk, cups, and commercial rent. PST and RST paid in British Columbia, Manitoba, and Saskatchewan are not recoverable through the GST/HST ITC mechanism; they remain a business cost.
Do you need to register?
Worldwide taxable supplies over four quarters?
must register for GST/HST
may register voluntarily for ITCs
A POS system comparison can help you choose software that tracks tax collected by province and stores purchase invoices for ITC support.
Labelling requirements
The Canadian Food Inspection Agency (CFIA) is the regulator for packaged food labels. If you repackage coffee beans or sell packaged baked goods, a compliant CFIA label carries the common name, net quantity, ingredient list, allergen declaration, and dealer name and address.
Records to keep
CRA requires GST/HST registrants to keep records for six years from the end of the tax year. Sales records must show the tax collected by province. Purchase records must show the GST/HST paid to support input tax credits.
GST/HST recordkeeping checklist
- Register when taxable sales exceed $30,000 over four quarters
- Charge the correct provincial rate for each sale
- Keep purchase invoices showing GST/HST paid
- File and remit by the due date
What happens if you skip it
If you skip GST/HST registration or fail to remit collected tax, CRA can assess the amount you should have collected, plus penalties and daily compound interest. CRA may also file a return on your behalf and register you involuntarily.
One concrete consequence: CRA can assess the uncollected GST/HST plus penalties and daily compound interest.
For the full list of provincially required licences, filings and checks, see the coffee shop compliance guide.
