Nigel Smith, Author at - Page 3 of 6

A non-resident corporation must obtain a “Business Number” from the Canada Revenue Agency for federal sales tax purposes (the Goods and Services Tax—‘GST’) if it carries on business in Canada and its annual, world-wide GST taxable sales, including those of any associated persons, exceed $30,000.00. The relevant form is Form RC1. Different criteria apply for charities and public institutions. As well, non-residents who charge admissions in respect of a place of amusement, seminar, activity or event in Canada must register for GST notwithstanding the amount of sales and must do so before such admission is made.

In general, a Business Number must be obtained and a GST account opened before the thirtieth day following the day on which taxable goods or services are first supplied in Canada. Customers or clients of the non-resident will generally ask for the non-resident’s Business Number in order to claim input tax credits (ITCs) on the GST levied by the non-resident. Conversely, the non-resident must have its Business Number in order to claim its own ITCs on goods or services that it purchases in Canada. (For a description of ITCs, see the paper entitled, Canada’s Federal Sales Tax—An Overview for Non-Resident Suppliers.) In general, ITCs cannot be claimed for GST paid or payable on goods or services consumed, used or supplied before registration even if the GST is actually paid after registration. Exceptions are made only for GST paid or payable on: (i) capital property, real estate and inventory on hand for use in commercial activities at the time of registration; and, (ii) prepaid rent, royalties or similar payments that relate to the period following registration.


‹ B. Provincial Income Tax up

D. Provincial Sales Tax ›


The Federal government collects and remits taxes on behalf of all provinces (except Quebec). Consequently, no additional registration is required at the provincial level (except Quebec).

Quebec administers its own income tax. A non-resident must therefore obtain a Quebec Enterprise Number (‘NEQ’—Numéro d’enterprise du Québec) and open a separate income tax account if it carries on business in that province. The relevant form is LM-1-V. As with the Federal income tax, an NEQ need not be obtained until the income tax return for the first taxation year is filed. If an NEQ has not been obtained at that time then one will be assigned automatically.


‹ A. Federal Income Tax up

C. Federal Sales Tax ›


A non-resident corporation must obtain a “Business Number” from the Canada Revenue Agency and open an income tax account if it carries on business in Canada or disposes of taxable Canadian property. Although there is no requirement to open an income tax account prior to filing an income tax return for the first taxation year, a Business Number is generally required earlier for the purpose of opening a Federal sales tax—the Goods and Services Tax (GST)— account.

If the non-resident incorporates a Canadian subsidiary, a Business Number and income tax account are automatically provided for that subsidiary if the incorporation is under Federal law or the laws of the provinces of Ontario, Manitoba, British Columbia, Nova Scotia or New Brunswick. The Canada Revenue Agency generally mails out a notice confirming the Business Number and providing a summary of program accounts within 45 days of incorporation. For all other provinces (except Quebec), a Business Number is obtained and an income tax account opened by filing Form RC1.

 


‹ V. When and how do I register for Canadian tax purposes? up

B. Provincial Income Tax ›


Saskatchewan’s sales tax applies to all goods and certain services sold at a retail sale in Saskatchewan. This generally applies to all consumer purchases, as distinguished from purchases for the purpose of resale.

Goods includes all tangible personal property and extends also to electricity and to gas used in the operation of internal combustion engines and turbines.

The following services are generally taxable:

  • Computer services;
  • Credit reporting and collection;
  • Dry cleaning and laundry;
  • Lodging;
  • Real estate services;
  • Repair or installation;
  • Security or private investigation;
  • Telecommunications;
  • Telephone answering services;
  • Veterinary services;
  • Accounting;
  • Advertising;
  • Architectural;
  • Commercial building cleaning;
  • Employment placement;
  • Engineering; and
  • Legal.

In determining whether a sale occurs in Saskatchewan, it is the place of delivery, not the residence of the purchaser, that governs. Goods and services delivered by the vendor, or by a common carrier on behalf of the vendor, to the purchaser’s premises out of province are not, therefore, subject to Saskatchewan’s sales tax. If the goods are, however, subsequently brought into Saskatchewan for consumption or use in that province then such person must voluntarily self-assess and pay Saskatchewan’s sales tax at that time.

If the goods or services are exempt by reason of being delivered by the vendor or shipped by common courier outside the province, the vendor must keep a record of such deliveries, such was by a vehicle log or waybills.


‹ 5. Quebec up

V. When and how do I register for Canadian tax purposes? ›


A non-resident of Quebec that is not already a QST registrant is required become a QST registrant and to collect and remit QST on a supply made in Quebec of a movable property or service only if that supply is made in the course of carrying on business in Quebec. The factors generally considered to determine whether business is being carried on in a given jurisdiction include (but are not limited to) the following:

  • the place where agents or employees of the non-resident are located;
  • the place of delivery;
  • the place where purchases are made or assets are acquired;
  • the place from which transactions are solicited;
  • the location of assets or an inventory of goods;
  • the place where the business contracts are made;
  • the location of a bank account;
  • the place where the non-resident’s name and business are listed in a directory;
  • the location of a branch or office;
  • the place where the service is performed; and
  • the place of manufacture or production.

In addition to the foregoing considerations, a special rule requires a non-resident of Quebec that is not already a QST registrant to become a QST registrant and to collect and remit QST on a supply made in Quebec of a movable property or a service if that supply is of an admission in respect of an activity, a seminar, an event of a place of amusement unless the non-resident supplier acquired the admission from another person.

Place of supply rules

If it is determined that the supply is made in the course of carrying on business in Quebec, the place of supply rules apply to determine whether Quebec nevertheless concedes jurisdiction to another province. The place of supply rules apply equally to QST registrants and residents of Quebec.

According to the place of supply rules, the province with jurisdiction is generally the one in which the supply occurs. For example:

  • if the goods supplied are tangible personal property (referred to in Quebec as “corporeal movable property”) then the relevant province is generally the one in which the goods are delivered or made available to the recipient;
  • if the supply is of real estate then the relevant province is generally the one in which that real estate is located; and
  • if the supply is of intangible personal property, jurisdiction will depend on a number of factors, including the place in which the property can be used and the address of the purchaser as provided to the supplier.

When services are supplied, the relevant province is generally determined according to the home or business address of the purchaser, although specific rules apply for certain types of services. Services related to real estate, for example, are deemed to be made in Quebec if that real estate is located in Quebec.

The place of supply rules are extensive and the above examples are general and for illustrative purposes only.

When property and services are brought into an HST province from another province (whether or not such other province is also an HST province) or from outside Canada for consumption, use or supply in that HST province, the supplier is required to self-assess since no actual purchase and sale occurs.


‹ 4. Prince Edward Island up

6. Saskatchewan ›


Prince Edward Island (“PEI”) applies its sales tax to all goods and certain services sold at a retail sale in PEI. This generally applies to all consumer purchases, as distinguished from purchases for the purpose of resale.

Goods includes all chattels, i.e., personal property as distinguished from real estate, and also extends to computer software and related services.

The following services are generally taxable:

  • Admissions;
  • Telecommunications;
  • Laundry and dry cleaning;
  • Repair and installation labour;
  • Accommodations;
  • Golf;
  • Legal;
  • Accounting;
  • Consulting;
  • Engineering; and
  • Architectural.

In determining whether a sale occurs in PEI, it is the place of delivery, not the residence of the purchaser, that governs. Goods and services delivered by the vendor, or by a common carrier on behalf of the vendor, to the purchaser’s premises out of province are not, therefore, subject to PEI’s sales tax. If the goods are, however, subsequently brought into PEI for consumption or use in that province then such person must voluntarily self-assess and pay PEI sales tax at that time.

If the goods or services are exempt by reason of being delivered by the vendor or shipped by common courier outside the province, the vendor must keep a record of such deliveries, including the name, the proper mailing address and the telephone number of the purchaser.


‹ 3. Manitoba up

5. Quebec ›


Manitoba’s sales tax applies to all goods and certain services sold at a retail sale in Manitoba. This generally applies to all consumer purchases, as distinguished from purchases for the purpose of resale.

Goods includes all tangible personal property and extends also to computer software and various fixtures.

The following services are generally taxable:

  • Lodging;
  • Telecommunications;
  • Various services connected with tangible personal property;
  • Printing, binding and similar services;
  • Film production;
  • Sound recording;
  • Legal;
  • Accounting;
  • Architectural;
  • Engineering;
  • Security;
  • Private investigation; and
  • Tanning.

In determining whether a sale occurs in Manitoba, it is the place of delivery, not the residence of the purchaser, that governs. Goods and services delivered by a vendor, or by a common carrier on behalf of a vendor, to the purchaser’s premises outside the province are not, therefore, subject to Manitoba’s sales tax. If, however, the goods are subsequently brought into Manitoba for consumption or use in that province then such person must voluntarily self-assess and pay Manitoba’s sales tax at that time.

If the goods or services are exempt by reason of being delivered by the vendor or shipped by common courier outside the province, the vendor must support the exemption as follows:

  • If the goods are delivered by the vendor or its employee, the vendor and purchaser must sign a statement acknowledging that delivery was out of province; or
  • If the goods are delivered by common carrier, the vendor must retain the carrier’s bill of lading or the equivalent in order to substantiate the extra-provincial delivery. It should be noted, however, that this exemption only applies if the vendor engages the carrier. If the purchaser engages the carrier then the good are considered to have been picked up in Manitoba on the purchaser’s behalf.

‹ 2. British Columbia up

4. Prince Edward Island ›


British Columbia’s sales tax applies to all goods and certain services sold at a retail sale in British Columbia. This generally applies to all consumer purchases, as distinguished from purchases for the purpose of resale.

Goods includes all tangible personal property and extends also to computer software and various fixtures.

The following services are generally taxable:

  • legal;
  • lodging;
  • services to goods such as vehicle maintenance, furniture assembly and computer repair;
  • telecommunications, including internet services and certain digital and electronic media content such as music and movies; and
  • various services connected with tangible personal property.

Consulting, management and financial services are not taxable.

In determining whether a sale occurs in British Columbia, it is the place of delivery, not the residence of the purchaser, that governs. Goods and services delivered by a vendor, or by a common carrier on behalf of a vendor, to the purchaser’s premises outside the province are not, therefore, subject to British Columbia’s sales tax. If, however, the goods are subsequently brought into British Columbia for consumption or use in that province then such person must voluntarily self-assess and pay British Columbia’s sales tax at that time.

If the goods or services are exempt by reason of being delivered by the vendor or shipped by common courier outside the province, the vendor must retain the carrier’s bill of lading or the equivalent in order to substantiate the extra-provincial delivery.


‹ 1. Alberta (no sales tax) up

3. Manitoba ›


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


‹ B. Non-HST provinces—Alberta, Manitoba, Prince Edward Island, Quebec and Saskatchewan up

2. British Columbia ›



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