Nigel Smith, Author at - Page 2 of 6

Proceeds from the sale of goods in Canada are not subject to withholding of Canadian income tax. A non-resident must nevertheless file a Canadian income tax return and pay Canadian income tax on such proceeds if the goods are sold in the course of carrying on business in Canada. Canada’s tax treaties generally provide an exemption from Canadian income tax if the business is not carried on through a Canadian permanent establishment.

Under Canadian law, an income tax return must be filed by a non-resident that carried on business in Canada in the taxation year regardless of whether an exemption is available under a tax treaty.


‹ A. Services up

C. Investment Income ›


All payments for services performed in Canada by a non-resident of Canada are subject to income tax withholding at a rate of 15%. It is the obligation of the Canadian payor to withhold and remit this amount pursuant to Regulation 105 under Canada’s Income Tax Act.

The rate of withholding is unaffected by any reduction or exemption available under a tax treaty. While it is possible to apply for a waiver, a new waiver must be obtained with respect to each new contract. Blanket waivers are generally not issued.

The amount withheld is applied against the non-resident’s Canadian income tax liability. If a treaty reduction or exemption is available then a rebate may be obtained by filing a Canadian income tax return after the end of the taxation year.


‹ VI. What are my customers’ obligations to withhold income tax? up

B. Goods ›


Saskatchewan requires a taxpayer to obtain a “vendor’s licence” for that province’s ‘provincial sales tax’ if the taxpayer carries on business in the province. Registration must be in advance of sales. The relevant form can be found here.


‹ 6. Quebec up

VI. What are my customers’ obligations to withhold income tax? ›


Quebec administers both its own Quebec Sales Tax (‘QST’) and, in respect of business activities carried on in Quebec, the GST. If, therefore, a taxpayer carries on business in Quebec, the taxpayer must obtain an ‘NEQ’ and open separate accounts for income tax, Quebec sales tax (‘QST’) and GST. If the taxpayer already has a GST account with the Canada Revenue Agency, Quebec will use that same account. However, whereas a GST account need not be opened until the thirtieth day following the day on which the taxable goods or services are provided, a QST account must be obtained in advance, before any taxable goods are sold or services provided in that province. The relevant form can be found here.


‹ 5. Prince Edward Island up

7. Saskatchewan ›


Prince Edward Island requires a taxpayer to register as a vendor for that province’s ‘revenue tax’ if the taxpayer sells goods in the province. Registration must be in advance of sales. The relevant form can be found here.

 


‹ 4. Manitoba up

6. Quebec ›


Manitoba requires a taxpayer to register as a vendor for that province’s ‘retail sales tax’ if the taxpayer carries on business in that province. Registration must be in advance of sales. The relevant form can be found here.

Small businesses with annual taxable sales under $10,000.00 are not required to register and collect Manitoba’s sales tax. If such businesses choose not to register then they must pay sales tax on their own purchases and not charge sales tax to their clients or customers. They must indicate on their sales invoices that sales tax is included in the price (sales tax cannot be itemized on the invoice.)


‹ 3. British Columbia up

5. Prince Edward Island ›


British Columbia requires a taxpayer to register as a vendor for that province’s ‘provincial sales tax (PST)’ if the taxpayer sells or leases taxable goods, or provides software or taxable services in the ordinary course of business in B.C. Online registration can be found here.


‹ 2. Alberta up

4. Manitoba ›


Alberta is the only province that does not have its own sales tax, relying instead upon its oil revenues.

 


‹ 1. HST Provinces up

3. British Columbia ›


The sales taxes of Ontario, Nova Scotia, New Brunswick and Newfoundland & Labrador are administered with the GST. These combined provincial and federal sales taxes are known as Harmonized Sales Tax (‘HST’). The comments in respect of GST in the section entitled Federal Sales Tax apply equally to HST.

 


‹ D. Provincial Sales Tax up

2. Alberta ›



WEBSITE © SORBARALAW