GST/HST and QST on freight invoices and zero-rated loads

A freight service in Canada is taxed at the rate of the province where it ends: 5% GST, or HST at 13%, 14% or 15%. Freight from Canada to a place outside Canada, or from outside Canada into Canada, is zero-rated, and a domestic leg of either can be zero-rated too if the carrier holds the right paper. QST applies only when a load starts and ends in Québec.

This guide follows CRA's freight carriers page, GST/HST Memorandum 28-2 and Revenu Québec's freight transportation pages. It isn't tax advice: how a carrier treats a charge is its accountant's decision. The examples use Ashgrove Freight, a fictional carrier based in Mississauga ON.

What GST/HST rate applies to a freight invoice?

CRA's rates page lists the rates in force since April 1, 2025, when Nova Scotia's HST dropped from 15% to 14%. The last column applies each rate to one example charge of $969.00 (linehaul plus fuel) so the difference is visible.

B.C., Manitoba and Saskatchewan also have provincial sales taxes. How they apply to freight is a provincial question this guide doesn't cover; check with the province.

A load delivered in Halifax that was invoiced at the old 15% would carry $9.69 too much tax on that example charge. If your invoice template hard-codes provincial rates, check Nova Scotia's.

Which province's tax applies to a domestic load?

The destination's. Section 5 of Part VI of Schedule IX to the Excise Tax Act says a freight transportation service is made in a province "if the destination of the service is in the province." The destination is the place the shipper names where the goods are handed to the consignee. The origin doesn't matter.

CRA's own examples: Montréal to a wholesaler in Toronto is made in Ontario and taxed at HST; Ottawa to a wholesaler in Québec City is made in Québec and taxed at 5% GST. If one charge covers drops in two provinces, Memorandum 28-2 (paragraph 78) splits it into separate supplies, each taxed by its own destination, in proportion to the part of the charge reasonably attributable to each.

Worked example: load 48224. T. Okafor, unit 207, runs 48224 from Windsor ON to London ON. Both ends are in Ontario, so it's taxed at Ontario's 13% HST. The charges are example figures for this guide.

The example taxes the fuel surcharge with the linehaul, as part of the same service. Memorandum 28-2 says anything that is "part of, or incidental to" the freight service, supplied by the same carrier to the same customer, takes the service's tax status even if it's a separate line. Its examples are loading and unloading, packing, storage and refrigeration. Whether a given charge qualifies is a question of fact.

When is cross-border freight zero-rated?

Zero-rated means taxable at 0%: the carrier charges no GST/HST but may still claim input tax credits on its costs. The rules are in Part VII of Schedule VI to the Excise Tax Act.

A "continuous freight movement" is transport by one or more carriers to a destination the shipper specifies, with every carrier acting on the shipper's instructions. A "place outside Canada" includes a place in Canada while imported goods are still in bond and not yet released by CBSA.

What paperwork proves a zero-rated domestic leg?

It depends on the direction.

Export leg (section 7). The shipper gives the carrier a declaration that the goods are being shipped for export and that the carrier's service is part of a continuous outbound freight movement. Memorandum 28-2's appendix gives the wording, and says it can be printed on the bill of lading or given as a separate signed document. The goods must not be processed or altered in Canada before export. Under subsection 221(3), a carrier holding the declaration doesn't have to collect tax unless it knew, or could reasonably be expected to know, that the goods weren't going for export, the move wasn't a continuous outbound freight movement, or the goods were being diverted to a destination in Canada.

Import leg (section 10). No declaration; the carrier keeps "documentary evidence satisfactory to the Minister." CRA gives an air waybill showing origin and destination as an example. Revenu Québec's domestic inbound page describes a carrier delivering from Montréal to Toronto goods that arrived from England, which can zero-rate its service if it keeps a copy of the original bill of lading naming Toronto as the destination.

Interlining and owner-operators. When several carriers share one movement and one invoices the customer, only the invoicing carrier charges tax, at the rate for the movement's destination. What it pays the other carriers is zero-rated under section 11. Memorandum 28-2 applies this to an owner-operator subcontracted by a carrier, such as A. Brandt, but fuel and permits the carrier pays up front and recovers from the owner-operator are chargebacks, not zero-rated freight. CRA also says documents such as a driver's pay stub showing the probill and trip number should be kept to tie a charge to a freight service.

Worked example: is load 48213 zero-rated?

Load 48213 runs from Prairie Foods in Mississauga ON to Joliet IL over the Blue Water Bridge. Ashgrove Freight carries it end to end and bills Prairie Foods on invoice INV-10442. The CAD column uses 1.00 USD = 1.3720 CAD, an example rate used across this site.

The whole service is one supply from a place in Canada to a place outside Canada, and it's well over $5, so section 6 zero-rates all of it: the Ontario kilometres from Mississauga to Sarnia as well as the U.S. miles. Ashgrove Freight needs no shipper's declaration here, because that's a section 7 requirement for a carrier that hauls only a domestic leg. If Ashgrove Freight had carried the trailer only to Sarnia under its own contract and a U.S. carrier had taken it from there, the Sarnia leg would be zero-rated only with Prairie Foods' declaration on file.

Detention is the line to confirm. If it's incidental to the freight service, it's zero-rated with it. Section 162.1 says amounts paid on account of demurrage aren't consideration for a supply at all, and Memorandum 28-2 describes demurrage as payment for the detention of "a ship, freight car, or other cargo conveyance." Which reading fits a truck held at a dock in Joliet is for the carrier's accountant.

The backhaul, 48233 from Elwood IL to Mississauga ON for Northgate Home, is zero-rated under section 8: freight from outside Canada to a place in Canada.

How does QST apply to freight?

QST is 9.975%, calculated on the price before GST, not on top of it (Revenu Québec). Revenu Québec's freight rules charge QST when both origin and destination are in Québec, unless the service is part of a continuous freight movement to a place outside Québec or from outside Canada. Freight from elsewhere in Canada into Québec is deemed supplied outside Québec; a Québec-resident customer self-assesses the QST unless it acquired the service exclusively for its commercial activities. Freight from Québec to anywhere outside Québec carries no QST, and international freight is zero-rated for both taxes.

Three example lanes, each at an example charge of $1,200.00 CAD:

The Montréal → Québec lane is the only one with QST: $1,200.00 × 0.05 = $60.00 GST, and $1,200.00 × 0.09975 = $119.70 QST, both on the same $1,200.00. Load 48213 has no QST at all: it starts in Ontario and ends in Illinois.

What must the invoice show for the customer to claim input tax credits?

The customer can only claim an input tax credit if the invoice carries the information the Input Tax Credit Information (GST/HST) Regulations prescribe. CRA's input tax credit page says the thresholds rose from $30 and $150 to $100 and $500 as of April 20, 2021. Revenu Québec's invoice page uses the same tiers for input tax refunds, with two extra QST items under $100.

Most freight invoices, including INV-10442, are over $500, so they need every line. An invoice that mixes a taxable domestic charge with zero-rated international ones has to show which is which.

A carrier also has to be registered to charge GST/HST at all. CRA's registration page sets the small supplier limit at $30,000 of worldwide taxable supplies in a single calendar quarter or over four consecutive quarters, and zero-rated supplies count toward it. A cross-border carrier whose revenue is almost all zero-rated still passes the threshold quickly.

How should a TMS hold this?

The tax on a freight invoice follows from facts the load already carries, so the invoice should be built from the load:

• Origin and destination as structured fields, with the destination province driving the GST or HST line and a Québec-to-Québec load adding QST.
• Tax lines by jurisdiction, each with its rate and amount, and zero-rated lines marked as such.
• Registration numbers on every invoice: the carrier's GST/HST number and, if registered, its QST number.
• Zero-rating evidence on the load: the shipper's export declaration for a domestic export leg, the original bill of lading or waybill for a domestic import leg, and the probill and trip number that tie accessorials to the move.
• Both currencies for a USD invoice, with the rate used.

Roadmark's part is narrower. Its billing drafts the invoice from the POD, the driver's pay line and the carrier bill, a person approves it, and it posts to accounting (QuickBooks, NetSuite, Xero, Sage or Dynamics 365) once approved. On cross-border loads such as 48213, the cross-border page keeps both currency views of one load. Tax treatment is set by the carrier and its accountant. For the exchange-rate side, see billed in USD, paid in CAD; for the border filings on the same load, see ACE and ACI eManifest.