Canada: GST to be charged on digital goods and services from July 2021

28 May 2021

From 1 July 2021, the Canadian Revenue Agency (CRA) will introduce Goods and Sales Tax (GST)/Harmonised Sales Tax (HST) on sales of e-commerce goods and service transactions (including short-term accommodation sold online) made by non-resident companies to consumers.

Currently, non-resident businesses providing e-commerce goods and services to Canada do not generally have to charge GST/HST on their sales to consumers. However, to remove the unfair advantage this gives to non-resident companies over Canadian resident providers, the Canadian government will introduce GST at 5% and HST usually at 5% (dependant on the Canadian province), on these types of transactions. However, this new tax will not apply to business to business sales.

These rule changes mean that GST/HST will now apply to:

  • Sales of digital products and services by non-resident vendors.
  • Goods supplied through fulfilment warehouses located in Canada by non-resident vendors.
  • Short-term accommodation sold through online platforms

This new tax will only apply to non-resident businesses with sales in Canada above a threshold of C$30,000 (approx. £18,000) in a 12 month period, and to remove some of the administrative burden this new tax puts on these types of businesses, the CRA will introduce a simplified registration and VAT remittance system for these types of supplies specifically.

For sales made through digital distribution platforms or Online Market Places, the responsibility to register, collect, and remit the GST/HST would fall on the digital platform operator themselves regardless of whether they fulfil the product or not.

Are you trading globally? Whether you require basic VAT advice or specific VAT compliance support, Fiscal Solutions can help. Our team of multi-lingual experts are knowledgeable in all the different VAT rules in Europe and around the world.

We help you simplify today’s complexities and address tomorrow’s challenges. The values we represent, and our consistent advice, mean you can trust Fiscal Solutions to do the right thing – for you and your organisation.

Get in touch

Let us solve your current business VAT challenges

CONTACT US
LATEST NEWS

Ireland increases the VAT rate applied on...

The Irish government has confirmed that from 1 January 2026, the VAT rate will increase from 9% to the standard rate of 21% for: Accommodation...

SEE MORE
VAT news
LATEST NEWS

UPDATE: Philippines proposes to apply VAT on e-services

During May 2024, the Philippines Senate voted in favour in a second reading of Bill No. 2528 imposing VAT on foreign providers of digital services to...

SEE MORE
VAT news
LATEST NEWS

EU yet to reach an agreement on VAT in the digital age...

During May 2024, the Economic and Financial Affairs Council (ECOFIN) failed to reach agreement on the EU Commission’s proposed changes to VAT rules included...

SEE MORE
VAT news

Gated Content

The following email providers are not accepted: gmail, hotmail, yahoo. Please use proper company email.