Changes to Canadian sales tax, the Goods and Services Tax (“GST”) and Harmonized Sales Tax (“HST”), have been proposed with an effective date of July 1, 2021. The changes are applicable to certain non-residents selling to Canada.
Who May be Impacted?
- Non-residents selling to Canadian consumers;
- Non-residents selling e-commerce supplies and cross-border digital products and services;
- Non-residents selling goods supplied through fulfillment warehouses;
- Non-residents selling platform-based short-term accommodation;
- Non-residents with sales exceeding $30,000 CAD over a 12-month period.
What to Expect at the Provincial Level?
- Applicable to harmonized provinces;
- Quebec has rules applicable to non-residents selling to consumers;
- Saskatchewan has rules applicable to sales of electronic content and marketplace facilitators;
- Manitoba has rules applicable to sales of electronic content;
- British Columbia has new rules effective as of April 1, 2021 for some selles of goods, software and telecommunications services.
What is Next?
- Details are expected to be announced in the next federal budget (March 2021);
- Non-residents should review their Canadian sales following new rule announcements;
- Non-residents may need to register for GST/HST and adjust their accounting systems accordingly;
- Contact your Andersen in Canada advisor if you believe your company may be impacted by the new rules.
