VAT and Sales Tax Rates in Canada for 2024

Canada VAT Rate

5.00%

About $5 tax on a $100 purchase

Exact tax amount may vary for different items

The current Canada VAT (Value Added Tax) is 5.00%.

The VAT is a sales tax that applies to the purchase of most goods and services, and must be collected and submitted by the merchant to the Canada governmental revenue department.

Canada has one of the lowest VAT tax rates in the world, charging a maximum VAT rate of 5%.Countries with similar VAT rates include Switzerland with a VAT of 8%, United States with a VAT of 10% and Australia with a VAT of 10%.

VAT/Sales Tax	Reduced VAT Rate	World VAT Rank
5%	None	33rd of 34

Canada VAT Refund For Visitors

Visitors to Canada may be able to get a refund of the Canada VAT tax paid on any goods bought for deportation. To get a VAT refund, you must present receipts for the goods purchased (and possibly proof of your deportation of the goods) to a Canada VAT refund station (which are often found in airports, tourist offices, or international travel hubs).

Some localities have a minimum purchase price for which a VAT refund can be claimed, or certain purchase types which cannot be made tax-free. A VAT refund of up to 5.00% of your total expenditures may be refunded for qualifying purchases. Regulations on VAT and sales tax refunds vary across countries and by region, so be sure to check ahead before expecting a Canada VAT refund.

Canada VAT Law For Businesses and Merchants

Businesses in Canada are required to collect a sales tax of 5.00% on behalf of the government, which they must submit to the applicable Canada revenue department in a periodical VAT tax return. Unlike the United States' sales tax, which is only charged on sales to end consumers, the VAT is collected on all sales - even of raw materials.

Businesses may be required to register for a Canada VAT number or other identifier to enable the government to track and verify VAT tax returns. VAT collection is a responsibility of the merchant, and failure to collect and submit the appropriate tax amounts may result in severe penalties.