What is the sales tax in PEI?

Prince Edward Island (PEI) charges a 15% Harmonized Sales Tax (HST), which is made up of a 10% provincial sales tax (PST) and a 5% federal sales tax (GST). This is the highest retail sales tax rate in Canada – though it’s tied for the highest with New Brunswick, Nova Scotia, and Newfoundland and Labrador, which also charge a 15% sales tax.

Sales tax in PEI, Canada is charged on most goods and services though things like basic groceries and prescription drugs are exempt from tax in PEI.

In Canada, sales tax rates are determined by ‘place of supply,’ which refers to where the person purchasing the item is located. Therefore, online, out-of-province retailers who are selling to PEI residents would have to charge HST at the rate on purchases by PEI residents that are shipped to PEI – so long as they have reached the threshold required to charge GST and HST in Canada.

Who needs to collect sales tax in PEI, Canada?

Any business that makes taxable sales to customers in Prince Edward Island may be required to register and collect HST, depending on where it’s based and how it operates.

• Businesses based in PEI. Must register and collect HST on all taxable sales made to customers in the province.
• Businesses based elsewhere in Canada. Must register and collect HST once worldwide taxable supplies exceed $30,000 CAD in a single calendar quarter or over the last four consecutive quarters. (Source: CRA RC4022 – Small Supplier Rules)
• Non-Canadian businesses not carrying on business in Canada. Must register under the simplified GST/HST system once Canadian-sourced taxable sales to consumers exceed $30,000 CAD in the last four consecutive quarters. (Source: CRA RC4027 – Simplified Registration)
• Non-Canadian businesses carrying on business in Canada. Must register under the regular GST/HST system once worldwide taxable supplies exceed $30,000 CAD in a single calendar quarter or over four consecutive quarters. (Source: CRA RC4027 – Regular Registration)
• Marketplace sellers. If you sell to PEI customers through a registered online marketplace (e.g. Amazon, Etsy, or eBay), the marketplace is responsible for collecting and remitting HST on those sales. However, those marketplace sales still count toward your threshold limits for GST/HST registration. (Source: CRA Digital Economy Rules, 2021)

How to register to collect HST in PEI

PEI is signed on to what’s called the Harmonized Sales Tax. This is a way for provinces to simplify sales tax collection for businesses by centralizing it at the federal level along with the federal goods and services tax (GST).  That means that, unlike some Canadian provinces like British Columbia and Manitoba,  PEI doesn’t administer sales taxes through its provincial sales tax authority but via the Canada Revenue Agency (CRA).

That means that you’ll have to register to collect sales taxes in PEI through the CRA. In order to register to collect HST in PEI, you’ll need the following information:

• Business name
• Business number (register for one here if you don’t already have one)
• Type of business or organization (ex. sole proprietor, partnership, corporation, non-profit/society, registered charity)
• Name and social insurance number of all the owners
• Physical address
• Mailing address (if different)
• Description of business activity

You can easily register here on the CRA’s website.

Compliance Tip: Register early if you’re scaling quickly or planning promotions that you think will boost your global or Canadian sales over the $30,000 threshold as you need to register and start collecting sales tax as soon as you hit the threshold.

Sales tax exemptions: what’s exempt from sales tax in PEI?

There are a number of items that are exempt from sales taxes in PEI, including:

• Basic groceries
• Prescriptions drugs and services
• Medical devices
• Feminine hygiene products
• Agriculture products
• Services like music lessons, insurance, financial education, and some educational services.

For more information about the province’s sales tax exemptions, visit the CRA’s website.

Are there any sales tax rebates in PEI?

Yes. PEI applies point-of-sale rebates on printed books, children’s clothing/footwear, home heating oil for the 10% provincial tax only. 5% GST still applies on these items.

Filing and remitting PEI HST for provincial sales

The CRA expects businesses to file their sales taxes either monthly, quarterly, or annually depending on the business’ annual schedule.

Here’s a diagram that lays out the various thresholds that determine your filing frequency.

Once you’ve filed your first GST or HST return, the CRA will assign you a default schedule, but you may request a change if your revenue fluctuates and you want to file more frequently. The CRA might also want you to file your sales taxes annually but remit your sales taxes more frequently. Many businesses end up having to file annually but remit their taxes quarterly in instalments based on the amounts that the CRA estimates you own.

How to file HST in PEI

Filing HST in PEI is pretty easy. To do so, all you have to do is the following:

• Log in to your CRA My Business Account
• Submit your HST return electronically – including any GST and HST collected in other jurisdictions in Canada.
• Include your total sales, tax collected, and any input tax credits (ITCs) if applicable. ITCs are a kind of HST tax credit where you can claim HST you’ve already paid against the amount you owe.

That’s it. Then, you can just submit your HST filing.

How to remit HST payment in PEI

Your deadline to remit your HST payment in PEI might be different than your deadline to file your HST. In cases where you file monthly and quarterly, you’ll have one month after the end of the reporting period.

However, if you’re filing annually, it gets a little complicated. If your fiscal year-end is December 31, you have until April 30th to remit your sales taxes and until June 15th to file. However, if your fiscal year-end is another date, you’ll have 3 months after the end of that fiscal year to remit and file.

Paying your HST is easy – just pay electronically through your financial institution or via the CRA portal. Late payments can incur penalties, so be sure to avoid sending in your payments late.

Penalties for late HST filing in PEI

There’s technically no penalty for filing your HST late in PEI unless you received and ignored a demand to file a letter from the CRA (there is a $250 penalty for not doing so). However, there is a penalty for paying your HST late. That’s because the CRA charges interest on any late payment

The interest is calculated in the following manner:

• 1% of the amount you owe + (0.25% of the amount you owe x number of months the return is overdue)

Failure to file can also trigger audits or loss of compliant status, so make sure to file and remit your payment on time with the right amount of tax.

Compliance tip: If you’re selling into PEI (or any Canadian province), managing multi-platform filings manually can lead to missed deadlines or overpayments. TaxCloud automates your tax collection and generates reports to simplify remittance — especially for U.S. sellers expanding into Canada.

What if you sell in PEI from outside Canada?

If your business is based outside Canada, your sales to Canadian customers — including those in PEI — can still trigger GST/HST registration requirements. The key factor is whether the CRA considers you to be “carrying on business in Canada.”

• If you are not carrying on business in Canada: You must register under the simplified GST/HST regime once your Canadian-sourced taxable sales exceed $30,000 CAD in any 12-month period (past or expected).
• If you are carrying on business in Canada: You must register under the regular GST/HST regime once your worldwide taxable sales exceed $30,000 CAD in a single quarter or over the last four consecutive quarters.

How does PEI sales tax compare to other Canadian provinces?

Sales tax in Canada varies significantly by province. While Prince Edward Island uses a 15% Harmonized Sales Tax (HST), other provinces take different approaches — some combine GST and PST, others use HST, and a few have no provincial tax at all.

Understanding how PEI compares helps sellers navigate cross-provincial compliance more effectively.

If you’re selling into multiple provinces, sales tax automation software can help simplify multi-rate, multi-agency compliance — especially as you scale across Canada.