GST/HST and motor vehicles
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GST/HST and motor vehicles
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GST/HST on the private sale of a specified motor vehicle
GST/HST on the sale of a specified motor vehicle by a GST/HST registrant
GST/HST on the lease of a specified motor vehicle
GST/HST on gift of a specified motor vehicle
GST/HST rebate on the purchase of or modification to a qualifying motor vehicle
GST/HST on sales of specified motor vehicles
The GST/HST on the sale of specified motor vehicles may apply differently to governments and municipalities, Indigenous peoples, foreign representatives and diplomatic missions, and customers outside Canada (import and exports).
GST/HST on the private sale of a specified motor vehicle
When you buy a specified motor vehicle through a private sale (for example, you bought the vehicle from a person who is not a GST/HST registrant), the GST/HST does not generally apply to the private sale.
However, you may have to pay the provincial motor vehicle tax when you register the vehicle. Your provincial government charges and administers this tax, which is separate from the GST/HST.
You do not have to pay the provincial motor vehicle tax in some cases, including the following situations:
- You bought your vehicle in a participating province from a GST/HST registrant (for example, a fisher or farmer) who used the vehicle in their commercial activities . The registrant should have collected HST
- You are moving from one participating province to another participating province, and you have already paid HST on the vehicle
- You lived in a non-participating province before moving to a participating province, and owned and used your vehicle before the move. This depends on how long you owned the vehicle and whether you paid the provincial sales tax (PST) in a non-participating province. (If you are registering your vehicle in Nova Scotia, you do not have to show proof that you paid PST in a non-participating province.)
- You are returning to Canada after an absence of at least one year, and you owned your vehicle and used it abroad for at least six months
- You inherited the vehicle
GST/HST on the sale of a specified motor vehicle by a GST/HST registrant
Generally, when you buy a specified motor vehicle from a GST/HST registrant (for example, a dealership), the GST/HST applies on the sale. The GST/HST rate to be used generally depends on several criteria such as the place of delivery and date of registration.
Learn more: GST/HST on sales of specified motor vehicles.
If you trade a used vehicle for full or partial payment, the GST/HST treatment depends on if you have to charge tax on the trade-in.
Learn more: GST/HST in special cases – Trade-ins.
Who has to pay the provincial part of the HST and when
Generally, you have to pay the provincial part of the HST or a portion of it when you register your vehicle in a province where the HST applies or if you bring the vehicle into a participating province from:
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another province or other area in Canada and you were not required to pay the provincial part of the HST for the supply of the vehicle or you were required to pay it at a lower rate
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outside Canada and you were not required to pay the provincial part of the HST on the importation of the vehicle
However, you may need to self-assess the amount owing. Generally, if the provincial laws relating to motor vehicle registration do not require you to register the vehicle, you have to self-assess the amount owing if you bring the vehicle into a participating province from:
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a non-participating province
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a participating province with a lower HST rate
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outside Canada
Use Form GST489, Return for Self-assessment of the Provincial Part of Harmonized Sales Tax (HST) to self-assess the provincial part of the HST or the difference between the two HST rates.
How and when to recover the provincial part of the HST
You can get a rebate of the provincial part of the HST you paid on specified motor vehicles, or a portion of that part, if you meet all of the following conditions:
- You are a resident of Canada
- You bought the vehicle in a participating province and paid HST on it
- You bought the vehicle for consumption, use, or supply exclusively (generally 90% or more) outside the participating province
- You brought the vehicle from the participating province to another province or other area of Canada that has a lower provincial part of the HST or no HST no later than 30 days after it was delivered to you (any amount of time that the vehicle was in storage is not counted as part of the 30 days)
- If you brought the vehicle from the participating province to a non-participating province or other area of Canada, you paid the provincial sales tax of the non-participating province or other area of Canada as well as any other taxes that apply
To apply for the rebate, use Form GST495, Rebate Application for Provincial Part of Harmonized Sales Tax (HST).
GST/HST on the lease of a specified motor vehicle
Generally, when you lease a specified motor vehicle from a business that is a GST/HST registrant, you have to pay the GST/HST on your lease payments.
If you trade a used vehicle for full or partial payment for a lease, the GST/HST treatment depends on if you have to charge tax on the trade-in.
Learn more: GST/HST in special cases – Trade-ins.
| Lease period (must be continuous) | GST/HST application |
|---|---|
| Three months or less | GST/HST applies on lease payments at the rate of the province or other area in Canada where the supplier delivers the vehicle or makes it available to the customer. |
| More than three months | GST/HST applies on lease payments at the rate of the province or other area in Canada where the vehicle must be registered under the laws of that province. |
GST/HST on gift of a specified motor vehicle
A used specified motor vehicle supplied by way of a gift between two related individuals is generally not subject to the GST/HST.
GST/HST rebate on the purchase of or modification to a qualifying motor vehicle
You may be eligible to claim a specially-equipped motor vehicle rebate if you paid GST/HST on the purchase of a qualifying motor vehicle , or you paid GST/HST on a modification service performed on your motor vehicle.
To apply for the rebate, use Form GST518, GST/HST Specially Equipped Motor Vehicle Rebate Application.
Learn more: Excise and GST/HST News – No. 83 (Winter 2012).
GST/HST on sales of specified motor vehicles
The following tabs show how the GST/HST is applied in various circumstances on a sale made by a GST/HST registrant.
| Where the vehicle is delivered or made available |
Where the vehicle is registeredFootnote 1 | Tax payable on delivery |
|---|---|---|
| Participating province or non-participating province |
Non-participating province | GST and the provincial motor vehicle tax |
| Participating province | Participating province | HST at the rate of the province where the vehicle is registered |
| Non-participating province | Participating province | GST |
Tax payable when the vehicle is registered more than seven days after the delivery date
| Place of supplyFootnote 2 | Where the vehicle is registeredFootnote 1 | Tax payable on delivery | Tax payable on registration | Eligible rebate (Form GST495) |
|---|---|---|---|---|
| Participating province | Non-participating province | HST | None | Provincial part of the HST |
| Participating province | Participating province with a lower HST rate | HST at the rate of the province where the supply was made | None | The difference between the two HST rates |
| Participating province | Participating province with a higher HST rate | HST at the rate of the province where the supply was made | The difference between the two HST rates | None |
| Non-participating province | Non-participating province | GST | Provincial motor vehicle tax | None |
| Non-participating province | Participating province | GST | Provincial part of the HST | None |
Footnotes
- Footnote 1
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Vehicle registration
Generally, the supply of the registration for the specified motor vehicle would be considered to be made in a particular province if both of the following apply:
- The recipient or someone on their behalf registers the vehicle (other than temporarily) under the laws of the particular province within seven days after the day the vehicle is delivered or made available to the recipient or someone acting on their behalf
- The supplier has satisfactory proof of that registration
Documents the supplier must keep
A supplier must keep the following documents in its records:
- a copy of the vehicle's permanent registration that shows the date, the province the vehicle was registered in, and the recipient's name
- a copy of the vehicle purchase agreement, or another sales document such as a bill of sale, that shows the date the vehicle was delivered
- Footnote 2
-
Place of supply
Generally, the supply of a specified motor vehicle by way of sale is made in a province if the supplier:
- delivers the vehicle in that province to the vehicle's recipient
- makes the vehicle available in that province to the vehicle's recipient
In addition, a vehicle is considered to be delivered in a province if the supplier:
- ships the vehicle to a destination in the province specified in the contract for carriage of the vehicle
- transfers possession of the vehicle to a common carrier or consignee they hired on behalf of the recipient to ship the vehicle to the province
Specified motor vehicle
Participating province
Commercial activity
Relation
Qualifying motor vehicle
Modification service
Recipient
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- Date modified:
- 2024-01-03