Canada Invoice Template
Create free Canada invoices online with VAT
Create free Canada invoices online with VAT
Simplify filing VAT in Canada with FreeInvoiceBuilder.com. These invoice templates have built-in fields for required information; just fill the fields, download, and send. Build your VAT-compliant invoice for Canada today.
In order to be compliant with Canadian VAT regulations, all registrants must issue invoices that include all of the details necessary to process ITC claims. You can issue invoices electronically in Canada on the condition that they contain the above information. All records and invoices must be saved for six years and be stored according to electronic record requirements. Keeping accurate records or all invoices, including returned or canceled transactions and receipts for all business-related expenses, will make your ITC reclaim easier and will ensure that your business remains compliant with Canadian tax law.
Canada Invoice Requirements
|✔ Business name and address|
|✔ Date of invoice or supply of service|
|✔ Business Number|
|✔ Total amount before GST/HST|
|✔ The total amount of sales tax charged|
|✔ Indicate items liable for GST or those liable for HST/QST/PST|
|✔ Payment terms|
|✔ Description of goods or services|
In Canada, the value-added tax (VAT) applies to all tax liable goods and services supplied in the country. There are several types of sales taxes applied in Canada, depending on the area of supply:
● Federal Goods and Services Tax (GST) is collected on all taxable goods and services in every province and territory.
● Harmonized Sales Tax (HST) is collected on goods and services supplied in the provinces of Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador.
● Quebec Sales Tax (QST) is collected only in the province of Quebec.
● Provincial Sales Tax (PST) or retail sales tax is levied in the provinces of British Columbia, Saskatchewan, and Manitoba.
The federal tax authority is the Canada Revenue Agency (CRA), however, each province or territory will also maintain a separate tax authority.
Unlike many countries with VAT schemes, Canada levies sales tax both at the federal level and at the provincial level. Once you are registered for GST, you are also registered for other sales taxes in the provinces and territories.
|Province or Territory||Tax Rate|
|British Columbia||5% GST + 7% PST|
|Manitoba||5% GST + 8% PST|
|New Brunswick||15% HST|
|Nova Scotia||15% HST|
|Northwest Territories||5% GST|
|Prince Edward Island||15% HST|
|Quebec||5% GST (TPS) + 9.975% QST (TPQ)|
|Saskatchewan||5% GST + 5% PST|
Aside from taxable goods and services, the following tax rates apply:
● GST zero-rated Goods and Services include some food and beverage items, medical products and services, and agricultural products.
● Tax-Exempt Goods and Services include educational, financial, and health services.
Most goods and services supplied in Canada are taxable. As an individual or entity selling to end consumers in Canada, you are required to register for GST purposes under the following conditions:
● You supply goods or services that are taxable, and your sales exceed CAD30,000 in a calendar quarter.
● You import goods into Canada.
● You host an event, seminar, or convention in Canada.
● You may voluntarily register for GST, even if you do not meet the above stipulations.
In order to collect, pay, and reclaim VAT, an individual or entity must register to receive a GST number and have a payment account attached to the registration.
To register for GST/HST in Canada, you will first have to apply for a business number (BN). This business identification will be included in all tax invoicing and filing with CRA. To be assigned a business number, you will need to complete Form RC1, Request for a business number, and certain program accounts and send it to the applicable tax services office.
Depending on your business’s total annual revenue, you will be required to file GST either annually, quarterly, or monthly. Other rules might apply to HST, QST, or PST, so it is worth verifying regulations in these areas to ensure compliance. You can submit GST returns online once you have a business number and have registered for GST/HST.
The online form will calculate the sum of your input VAT, or Input Tax Credits (ITCs) and if you have spent more tax on business-related taxes than the amount of taxes you have collected from sales, you will be entitled to a GST refund. If the GST/HST you have collected is greater than your ITCs, you will pay the difference to CRA.
Non-residents, for example including many E-Commerce sellers or remote freelancers, who do not have a Canadian bank account, can pay VAT by wire transfer or through a third-party service provider. For tax purposes, all currencies will be converted to Canadian dollars using the exchange rate on the day of payment.