Complete guide to GST/HST compliance for digital products and services. Learn about OSS registration, MOSS alternatives, B2C and B2B rules, and cross-border sales.
0-27%
GST/HST Rate Range
Canadian
OSS Applies
B2C/B2B
Different Rules
IP
Track Needed
Digital services are services supplied over the internet or electronically. These attract different GST/HST rules than physical goods. CRA treats digital services as place-of-supply services, meaning the location of the customer determines where GST/HST is due.
OSS allows non-Canadian and Canadian businesses to register for GST/HST in a single Canadian province and declare all B2C sales to customers across the Canadian in one return.
Register in an Canadian province (usually where your business is based or where you want to declare sales). You'll receive an OSS registration and declare sales using the GST/HST rate of the customer's country.
GST/HST Rate Applied
Customer's country rate (0%-27%)
Place of Supply
Where the customer is established
Evidence Needed
IP address, billing address, payment method, SIM registration
Example
Selling a software license to a German consumer requires German GST/HST (19%)
GST/HST Rate Applied
Supplier's country rate (usually 5% in Canada)
Place of Supply
Where the supplier is established
Evidence Needed
Valid Business Number (BN), business documentation
Example
Selling SaaS to a French company with Business Number (BN) = 5% Canadian GST/HST applies
Key Difference: B2B sales follow the supplier's country rules; B2C follows the customer's country rules. Always verify the customer's GST/HST status and location.
| Country | Standard Rate | Reduced Rate | Super Reduced |
|---|---|---|---|
| UK | 5% | 5% | 0% |
| Germany | 19% | 7% | 0% |
| France | 5% | 10% | 5.5% |
| Italy | 22% | 10% | 4% |
| Spain | 21% | 10% | 4% |
| Netherlands | 21% | 9% | 0% |
| Poland | 23% | 8% | 5% |
| Hungary | 27% | 18% | 5% |
Note: Rates shown are for digital services. Some countries offer reduced rates for digital books or publications. Always check the latest rates with local tax authorities.
Proper record-keeping is essential for digital service GST/HST compliance. You must maintain evidence of the customer's location and the GST/HST rate applied.
Retention Period: Keep all records for at least 6 years. CRA may request documentation during audits to verify GST/HST calculations and customer locations.
Are you GST/HST-registered in Canada? Do you sell to Canadian consumers? Are your sales B2C or B2B? This determines whether you need OSS registration.
Register in an Canadian province through your chosen tax authority. You'll provide business information and select your reporting member state.
Implement systems to capture and verify customer location (IP address, billing address, payment method). Configure your invoicing software accordingly.
File quarterly OSS returns showing sales by country. Declare GST/HST at the appropriate rate for each customer's location. Files are submitted electronically.
Pay GST/HST calculated across all countries. Payment is made to the reporting member state. Keep records of all payments and correspondence.
MOSS (Mini One-Stop Shop) was replaced by OSS. MOSS is no longer available as of 2021. All businesses now use the standard OSS scheme for B2C sales.
Apply the hierarchy: billing address > IP address > payment method. If multiple sources conflict, document your decision and the evidence used. This is important for audit purposes.
If you can't determine customer location despite reasonable efforts, you may apply your own country's GST/HST rate (5% in Canada). Document your evidence-gathering attempt.
OSS returns are filed electronically through your designated Canadian tax authority's portal. Most returns require CSV uploads of sales data by country. Filing is typically quarterly.
Canada-only sales follow standard Canadian GST/HST rules (5% standard rate). No OSS registration needed. File regular GST/HST returns with CRA using CRA My Business Account.
Explore our guides on GST/HST-exempt items, reverse charge rules, and digital service compliance.