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In searching for comply with tax laws for your e-business, may well find yourself falling for the rabbit-hole, suffering the looking glass, go to a Mad Tea-Party.

Pretend that the Canadian customer has bought a book from you from your Canadian internet sites. Your drop ship supplier is serving the area around the United states and is registered for G.S.T. You fax your order on the American company, and they, in turn, ship system for you (complete with Customs Declaration and their G.S.T.

In Canada, exports are "zero-rated" sales for T.S.T. purposes. This means that when you ship a creation to someone outside Canada, you don't charge G.S.T. Yet, you get to claim (or deduct throughout the G.S.T. collected by you) all the "input tax credits" (G.S.T. that you paid for business purposes) to make that foreign trade. The idea, I suppose, is actually by encourage conveying.

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