Question
My online e-commerce business is based in Alberta, how do I charge PST/GST/HST?
We've an Internet consulting service business with no physical deliveries. My understanding is the following, is it correct? -Charge GST to every one of our customers within Canada, except for people from the HST provinces where we charge HST according to their rates; -No need to charge PST at all, as I can let my customers remit PST due to their province (assuming they're honest about it); -no need for international customers. If sale < $30,000, PST/HST? ### -no need for great detail. General guidelines are fine; -don't worry about the upcoming new HST rules.
1 month ago - 1 answers
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What you have said is generally correct. For PST I'm only familiar with Ontario's but services are generally not taxable so this would not affect you or your customers. You must collect GST/HST once worldwide sales are greater than $30,000. If below you can choose to register for GST so you may claim input tax credits (ITC) for the GST you paid on products purchased. You would have to weigh whether you are purchasing enough items that you could claim ITCs on to make registering for GST worthwhile. Generally speaking most companies I know of that are below the 30,000 limit do not bother registering. Regarding whether you charge HST instead of GST for customers in the HST provinces will depend on a few things. See below for detailed response but in summary assuming what you are doing is considered a service, all the work is done in Alberta and you do the negotiations from Alberta than you will only charge GST to customers in the HST provinces. Detailed response to determine whether you need to collect HST to provinces currently charging HST: 1. You need to determine whether what you are providing is a service or intangible product. Please see my first source below. Based on your description I will assume it is a service business but if that consulting involves programming you might want to read over the first source (it's only a page). 2. You must determine whether the intangible product or service was "made" (according to CRA criteria) in a participating province (ie. one of the provinces that currently charges HST). If it was made in the participating province than you must charge HST, if outside a participating province than you only charge GST. To determine where it is made the CRA looks at the following criteria (assuming it's a service, if not please see 2nd source). a) Canadian element: a service is considered to be supplied in a particular province if all or substantially all of the Canadian element of the service is performed in that province. b) Place of negotiation: A supply of a service is also considered to be made in a particular province if the place of negotiation for the supply is in the province, and all or substantially all of the service is not performed outside that province. (Eg. If you negotiated the contract in Nova Scotia but did the work in Alberta it would be considered made in Nova Scotia and thus HST would be collected).
Source(s)
Intangible or service? - www ... Whether supplies are 'made' in a participating province (ie. those that charge HST) - www ... GST mandatory when over $30,000 - www ...
by cdntaxman
1 month ago
Asker's Rating: 