Overview of Manitoba’s RST changes
Beginning Jan. 1, 2026, businesses that provide cloud computing services to customers in Manitoba, such as software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS), will be required to collect and remit RST on these services. This includes a wide range of products delivered over the internet, including:
- Software and video game subscriptions
- Data storage and processing
- Virtual servers and network infrastructure
- Development and deployment platforms
This change will affect businesses operating in Manitoba as well as those outside the province, both in and outside Canada, who provide cloud computing services to customers in Manitoba. Software will be considered to be delivered in Manitoba if the purchaser is ordinarily situated in Manitoba or the software is purchased in the province for use on, through or with an electronic device ordinarily situated in the province.
What does this mean for businesses?
Businesses that provide cloud computing services to customers in Manitoba may now have RST registration and collection responsibilities beginning Jan. 1, 2026, and will need to prepare. In addition to RST registration, it will be essential for affected suppliers to review billing systems, update tax compliance processes, and ensure that all necessary adjustments are made to accommodate the new tax collection and remittance requirements.
Next steps for remaining complaint
The introduction of RST on cloud computing services reflects a significant shift in the taxation landscape in Manitoba. It is crucial for businesses to stay informed and proactive in adapting to these changes to ensure seamless compliance and avoid any potential penalties. To ensure compliance with the new tax regulations, affected businesses should:
- Consult with BDO Canada’s Indirect Tax team to understand the full implications of the change and their related obligations.
- Update their accounting systems and tax engines to incorporate the new RST charges on applicable cloud computing services.
- Communicate the changes to customers to ensure they are aware of the additional tax charges that will apply.
The information in this publication is current as of Oct. 1, 2025.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.