GST/HST, QST and PST on cloud hosting and servers: what Canadian businesses pay in 2026

Hosting, VPS, dedicated server rental and public cloud services are generally taxable supplies in Canada. Expect GST or HST on the invoice depending on your province, QST as well if you are in Quebec, and in some provinces provincial sales tax on software or cloud services. A GST/HST-registered business can usually recover GST/HST charged by a regular registrant as an input tax credit (ITC), so the tax is mainly a cash-flow cost. Two exceptions matter for cloud buyers: tax charged by a non-resident provider registered only under the simplified GST/HST regime generally cannot be claimed as an ITC, and provincial sales tax is generally a final cost.

This guide is part of the pricing overview. Rates were checked against CRA pages in October 2026; confirm on canada.ca before relying on them. This is general information, not tax advice.

Rates that commonly appear on hosting invoices

Which rate applies follows the place-of-supply rules for services and intangible property, generally based on your business address as recorded by the supplier. If you have offices in several provinces, check which address each account uses.

Non-resident providers and the simplified regime

Since 1 July 2021, non-resident vendors of digital products and services that sell to Canadian consumers must register under a simplified GST/HST regime and collect tax. Many large international cloud providers also register under the normal regime and issue invoices with a GST/HST number. For a business buyer, the practical rules are:

• Give your GST/HST registration number to the provider, usually in the billing or tax settings of your account. A simplified registrant is not supposed to charge GST/HST to a registered business that provides its number.
• Tax charged by a simplified registrant is generally not recoverable as an ITC. If you were charged because you did not enter your number, ask the provider to correct it.
• If a non-resident provider charges no tax, a business that uses the service exclusively in commercial activities generally does not have to self-assess GST/HST on the imported service. Businesses with exempt activities (some financial services, health care, residential rentals) should check the self-assessment rules for imported taxable supplies.
• Quebec has its own registration regime for suppliers outside Quebec, so QST may appear on invoices from foreign providers too. Give them your QST number as well.

Claiming input tax credits

To claim an ITC for GST/HST paid to a regular registrant, keep invoices that show the supplier's name and GST/HST registration number and the other information the CRA requires; more details are needed for purchases of $100 or more and of $500 or more. Cloud invoices are often downloadable PDFs in the billing console: export them monthly into your records rather than relying on access to the console later.

Worked example (illustrative)

An Ontario business pays a regular-registrant provider $978 a month for cloud services.

• HST: $978 × 13% = $127.14
• Total charged: $1,105.14
• ITC claimed on the next return: $127.14, so the final cost is $978

If the same $978 were charged by a simplified-regime registrant that applied HST because no registration number was on file, the $127.14 would generally be a final cost, about $1,525.68 a year that could have been avoided.

Use the tax, FX and renewal calculator with your provincial rate to see the cash amount.

Quebec example

A Montreal business buys hosting for $400 a month from a provider registered for GST and QST.

• GST: $400 × 5% = $20.00
• QST: $400 × 9.975% = $39.90
• Total: $459.90; both taxes are generally recoverable (ITC and input tax refund) for a registrant using the service in commercial activities.

Digital services tax: not a sales tax

Canada's Digital Services Tax was a tax on certain large companies' revenue, not a sales tax on customers. The Government announced on 29 June 2025 that it would rescind it and halt the collection due on 30 June 2025. The repeal was then enacted in the Budget 2025 Implementation Act, No. 1 (Bill C-15, S.C. 2026, c. 3, Royal Assent 26 March 2026), which repeals the Digital Services Tax Act retroactively, as of 20 June 2024. If a provider added a separate "DST" surcharge line to invoices in the past, check the current invoice and the provider's notices, and ask about the line if it still appears.

Deducting the cost

Hosting and cloud fees used to earn business income are generally deductible operating expenses for income tax. Recoverable GST/HST is not part of the expense; non-recoverable PST is. Servers you buy rather than rent are capital property; see on-premise server vs cloud cost. Exchange rates also affect the amount you record; see USD pricing and FX.

When to consult a professional

Ask an accountant if you have exempt or mixed activities, operate in several provinces, are charged tax you think is wrong, or prepay multi-year plans. Rules for provincial taxes on cloud services have changed in recent years.

FAQ

My US provider charged HST; can I claim it?

If the invoice shows a regular GST/HST registration number, generally yes. If the provider is registered under the simplified regime, generally no. Enter your GST/HST number in the account and ask for a correction.

Is a domain name registration taxable?

Generally yes, as a supply of a service or intangible property. Check the invoice and treat it like other hosting fees.

Do I charge GST/HST to my own customers for hosting I resell?

If you are registered and resell hosting to Canadian customers, you generally charge GST/HST (and QST in Quebec) on your own sales. Confirm with the CRA or your accountant.

Sources

• Canada Revenue Agency — GST/HST rates, digital economy measures (Notice 322), input tax credits
• Revenu Québec — QST and registration of suppliers outside Quebec
• Government of British Columbia — PST bulletins on software
• Government of Manitoba — RST bulletins
• Department of Finance Canada — Digital Services Tax announcement; repeal in the Budget 2025 Implementation Act, No. 1 on the Justice Laws Website
• Justice Laws Website — Excise Tax Act, Division IV (imported taxable supplies)