HST on Vehicles Sold for Export Out of Canada

Vehicles Sold to a consumer for export

  • if consumer takes delivery of vehicle from the dealer in Canada, HST must be charged by the dealer
  • even if proof of export is later obtained, the dealer is expected to remit the HST

Vehicles Sold to Business for export

No HST is payable if all of the following apply

  • purchaser does not use the vehicle in Canada prior to export
  • the vehicle must not be modified by the purchaser before being exported
  • dealer must have documentation to prove export
  • dealer should arrange for the vehicle to be delivered to the shipper and obtain a bill of lading from the shipper, showing the foreign destination as proof of export
  • if the vehicle is being shipped by rail or truck to a Canadian port and then exported by ship, the dealer will need to obtain the bill of lading directly from the overseas shipper, as the land shipper will not be able to provide a bill of lading for the overseas delivery

Vehicles Sold to Business or Consumer and Delivered Outside of Canada

If a vehicle is purchased for export, by either a Canadian or foreign purchaser, and the purchaser does not take delivery in Canada, the purchase is HST exempt if:

  • the dealer delivers the vehicle to common carrier (shipper) and obtains a bill of lading showing the foreign destination, or
  • the vehicle is delivered directly by the dealer to the United States and the dealer keeps an embossed copy of U.S. Entry Summary (Form 7501) or other valid U.S. Customs entry documentation




A “house” bill of lading is a document, created “in-house” by a carrier, intended to serve as a receipt to confirm a vehicle has been left with them for shipment overseas.


Some dealers are accepting these documents as “proof” a vehicle is leaving Canada, but is it really?

For example, if a carrier in Mississauga or Toronto issues such a document, it could serve as “proof” the vehicle was given to them, it might even serve as evidence of an “intention” to export the vehicle overseas if it says that … but is it “proof” the vehicle left Canada?

Where is the bill of lading establishing the vehicle was actually put on a boat in Montreal or Halifax bound for Russia, Africa or Europe? Nowhere.


We have seen dealers accept “house” bills of lading BEFORE they have even given up possession of the vehicle or in cases where they have delivered possession, not to the carrier as required, but to the purchaser directly, which is not permitted to claim a tax exemption.

A “house” bill of lading is just a piece of paper. Anyone could create such a document. Put yourself in the position of an auditor whose job is to find missing tax, confronted with a sale where no tax was collected and remitted because the vehicle was “exported” out of the country. If the ONLY proof of export you are shown is a document issued by a carrier telling a story about a vehicle that may (or may not) have ever been shipped overseas, would you accept it?

Knowing, as we do, how picky tax auditors can be, this would be like shooting fish in a barrel! And dealers know, when an auditor finds unremitted tax, who will be asked to pay it!


The other issue is curbsiding, when the “exporter” tells the dealer they know how it works because they “do it all the time”. If they do, they are required to be registered as exporters with OMVIC. We know one dealer who is presently before OMVIC’s Discipline Panel, potentially facing thousands of dollars in fines, for selling several vehicles to just such an operator, accused of “knowingly” supplying a curbsider with vehicles for export.


The easiest way to sell vehicles that are apparently going to be exported is to charge the HST as usual. Let the “exporter” claim the tax back from CRA.


But, if you want to sell a vehicle as tax exempt, because it is being exported, make sure you always deliver the vehicle to an exporting carrier and get the bill of lading from the Port where the vehicle is loaded on a boat and shipped. This is the “real” bill of lading. Keep it in the vehicle file as proof of the HST exemption. If the buyer appears to be someone in the “business” of buying vehicles for export, ask for their OMVIC registration. If they aren’t registered, refer them to OMVIC and decline the sale.