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Canada has what get call a national sales tax or a value added tax (VAT). This Goods and Services Tax (G.S.T.) of five percent (as at January 1, 2008) is applicable to many Canadian connections.


Pretend that the Canadian customer has purchased a book of from your Canadian world wide web. Your drop ship supplier is within the Usa and is registered for G.S.T. You fax your order to your American company, and they, in turn, ship system for you (complete with Customs Declaration and their G.S.T.


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In Canada, exports are "zero-rated" sales for K.S.T. purposes. This means once you ship a product to someone outside Canada, you don't charge G.S.T. Yet, you get to claim (or deduct from the G.S.T. collected by you) all the "input tax credits" (G.S.T. that you paid for business purposes) to make that ship. The idea, I suppose, Naver will be encourage conveying.


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Say you sold a regular membership for accessing digitized content (from various sources) in the Canadian web site to a customer in american. Since there aren't an restrictions as to where the intangible personal property might be used, and also the property is not considered intellectual property (nor the provision of a service), the American customer is subject to G.S.T., even when he never comes to Canada.


Not only is it critical decide whether a taxable sale was stated in Canada or not, additionally where in Canada. Whether it was made (or deemed to be made) any kind of of the Harmonized Sales tax (H.S.T.) provinces (Nova Scotia, New Brunswick, and Newfoundland and Labrador), a higher, thirteen percent H.S.T. rate applies (as at January 1, 2008). This is because those provinces have allowed Canada to gather their provincial sales taxes for one.

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