Canada – Manitoba: Provincial Sales Tax on Cloud Computing Services from January 1, 2026 

The Manitoba Department of Finance reminds that, starting January 1, 2026, the province will expand the scope of services taxable under the provincial Retail Sales Tax (RST). From the first day of the new year, providers of cloud-based services should charge RST when they provide services to customers whose place of business or residence is in the province. 

To assist responsible persons, the Department of Finance of Manitoba issued guidelines that explain in detail the scope of taxable services, the responsibilities of accountable persons, and other matters related to the new taxation regime for providers of cloud-computing services. 

The scope of the services under the RST is very broad, and it covers the most “popular formats” of digital services, Saas, IaaS, or PaaS.

Place of Supply – Manitoba 

Updates to the rules practically mean that, by January 1, 2026, access to software(without being downloaded first) installed on servers located outside Manitoba is taxable under provincial sales tax rules. Before this change, remote access to any of these types of cloud-computing services (where the server is located outside the province) was out of scope for RST. 

The use of packaged or prewritten software programmes, or the charges for their use, were taxable before this update. The purchase of custom software that is developed to meet the precise requirements of the person who ordered it remains exempt from RST.

How to Stay Compliant 

Non-resident providers of digital services, such as cloud computing (SaaS), should familiarize themselves with the new tax framework, which is specifically designed for the provision of a wide variety of digital services accessible to local residents, regardless of where the servers are located. 

When non-resident providers surpass the federal and/or provincial sales tax threshold, they should register for Manitoba’s retail sales tax. After registering, they are obligated to charge, collect, and remit the tax periodically collected. 

It is important to note that Canada’s Revenue Authorities have in place highly sophisticated online sales tax monitoring systems, making tax avoidance easily traceable.