| In trying to comply with tax laws for
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| | It is true that it is easier for Canada
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| your e-business,
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| | to assess
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| you may find yourself falling down the
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| | such items at the border than in
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| rabbit-hole,
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| | cyberspace, but
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| going through the looking glass, and
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| | I know of no cases of Americans being
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| attending a Mad
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| | taxed on
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| Tea-Party.Common sense, logic, and
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| | the books or cars they bring with them
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| fairness never did apply
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| | when they
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| fully to the field of taxation but this
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| | come to live in Canada for about half
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| is especially
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| | the year.As a Canadian registrant, one
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| true of e-commerce transactions.1.
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| | way you might legally
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| Canada Customs Welcomes You to
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| | avoid this silly March Hare is to
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| Canada!Since I`m located in Canada, let`s
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| | explicitly state on
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| start here.Canada has what you might call
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| | your website and invoice that use of
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| a national sales tax
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| | such intangible
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| or a value added tax (VAT). This Goods
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| | personal property in Canada is
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| and Services
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| | prohibited (or
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| Tax (G.S.T.) of seven percent is
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| | requires an additional fee and the
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| applicable to many
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| | payment of G.S.T.).3. When Imports
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| Canadian transactions.Not only is it
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| | Aren`t ImportsGoods shipped to Canada are
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| critical to determine whether a taxable
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| | subject to G.S.T. on
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| sale was made in Canada or not, but also
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| | importation. Such tax is often assessed
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| where in
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| | at the border.
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| Canada. If it was made (or deemed to be
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| | But what if you are a Canadian
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| made) in any
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| | registered for G.S.T.,
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| of the Harmonized Sales Tax (H.S.T.)
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| | selling to a Canadian customer but your
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| provinces (Nova
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| | supplier is in
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| Scotia, New Brunswick, and Newfoundland
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| | a foreign country?Pretend that your
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| and Labrador),
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| | Canadian customer has bought a book
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| a higher, fifteen percent H.S.T. rate
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| | from you from your Canadian website.
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| applies. This
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| | Your drop ship
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| is because those provinces have allowed
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| | supplier is located in the United States
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| Canada to
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| | and is
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| collect their provincial sales taxes for
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| | registered for G.S.T. You fax your
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| them.As well, each province and territory
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| | order to the
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| has its own
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| | American company, and they, in turn,
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| rules. Ontario charges eight percent
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| | ship the book for
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| retail sales tax
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| | you (complete with Customs Declaration
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| on many typical Internet transactions
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| | and their G.S.T.
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| whereas Alberta
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| | Business Number).Since they paid the
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| has no provincial sales tax.Of course,
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| | G.S.T., you wouldn`t think you
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| this is only scatching the surface. This
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| | would have to charge it again, would
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| entire article is an over-simplification
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| | you? "Wrong!",
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| of a very
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| | smiles the Cheshire cat. Since you are
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| complex subject. You will definitely
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| | a registrant
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| need
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| | located in Canada, you are required to
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| professional advice to help you through
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| | charge and
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| E-Commerce
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| | remit the G.S.T.But you are entitled to
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| Taxland.2. When Exports Aren`t
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| | input tax credits, aren`t you?
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| ExportsIn Canada, exports are
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| | In many cases, the answer is "No".It may
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| "zero-rated" sales for G.S.T.
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| | be very difficult for you to satisfy the
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| purposes. This means that when you ship
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| | documentary and other technical
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| a product to
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| | requirements. As an
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| someone outside Canada, you don`t charge
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| | example, it is not uncommon for American
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| G.S.T. Yet,
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| | suppliers to
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| you get to claim (or deduct from the
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| | absolutely refuse to give an invoice
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| G.S.T. collected
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| | breaking down the
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| by you) all the "input tax credits"
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| | G.S.T. or to allow you to be the
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| (G.S.T. that you
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| | Importer of Record.
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| paid for business purposes) to make that
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| | This complicates their life
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| export. The
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| | unnecessarily and they
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| idea, I suppose, is to encourage
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| | just don`t need the aggravation.There
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| exporting.However, if you export products
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| | are relieving tax provisions covering
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| other than tangible,
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| | drop
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| physical goods, beware! There are many
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| | shipping, sales agencies, and other
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| pitfalls to
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| | situations. In
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| watch out for.As one example, consider
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| | many cases, unfortunately, the most
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| digitized products that you
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| | practical solution
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| might sell from your Canadian website,
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| | is to allow the tax to be paid twice.4.
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| such as
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| | When You`re Subject to Tax Where You`re
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| e-books, downloadable software, or
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| | Not
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| subscriptions to
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| | Subject to TaxIt makes sense that
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| content. You would be considered to be
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| | countries impose a tax on sales and
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| selling
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| | income made in their own jurisdiction.
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| "intangible personal property". Unless
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| | But does it make
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| your product
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| | sense for Germany to tax sales made in
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| is also considered "intellectual
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| | the United
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| property" (such as
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| | States?In effect, starting July 1, 2003,
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| software or e-books that you produced or
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| | the European Union
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| have obtained
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| | has done just that by imposing an online
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| the rights for), you will have to charge
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| | sales tax.This means that if someone from
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| G.S.T. The
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| | England buys an e-book
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| reason why, according to the Canada
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| | from someone in the United States, the
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| Customs and Revenue
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| | American should
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| Agency, is that it COULD be used inside
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| | submit this tax. Of course, If the sale
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| Canada, even if
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| | was to someone
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| it isn`t.Say you sold a membership for
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| | in Germany, the tax rate would be
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| accessing digitized
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| | different.The rationale behind this
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| content (from various sources) on your
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| | follows: Since countries
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| Canadian
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| | can`t collect sales tax on Internet
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| website to a customer in the United
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| | transactions at
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| States. Since
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| | their borders, the only way they can
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| there are no restrictions as to where
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| | collect it (other
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| the intangible
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| | than a self-assessment system) is with
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| personal property may be used, and the
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| | an online sales
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| property is
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| | tax. Further, it is claimed that
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| not considered intellectual property
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| | businesses in the
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| (nor the
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| | European Union suffer a major
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| provision of a service), the American
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| | competitive disadvantage
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| customer is
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| | because they have to collect Value Added
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| subject to G.S.T., even if he never
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| | Tax (VAT) but
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| comes to
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| | others don`t.I know what they mean.
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| Canada.Strangely, the same logic doesn`t
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| | Welcome to the club!J. Stephen Pope,
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| apply when an
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| | President of Pope Consulting Inc.,
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| American buys a regular book (or a car)
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| | has been helping
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| which he
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| | clients to earn maximum business profits
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| COULD bring into Canada with him and use
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| | for over
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| here.
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| | twenty years.
|
