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Should Your Business Be Paying Provincial Sales Tax in Canada?

Foreign businesses may be liable to provincial sales tax in Canada. However, because the legislation is changing quickly and it’s not at a national level, keeping track of how you’re meant to remain compliant is difficult. This article highlights the requirements for provincial sales tax registration in Canada.

Background

Provincial Canadian tax authorities have either already introduced or suggested that foreign vendors will have to collect sales tax. The below summarises the rules pertaining to paying provincial sales tax in Canada. 

State Tax Regime Liable foreign suppliers Registration Threshold Effective date
Quebec QST
  • Specified suppliers
  • Specified digital platforms
  • Digital accommodation platforms (as of 1 January 2020)
30,000 CAD 1 September 2019
British Columbia PST
  • Foreign sellers of software & telecommunication services
10,000 CAD 1 April 2021
Saskatchewan PST 1 January 2020

(Data source)

In addition, other Canadian states abide by the federal GST & HST laws. 

Conclusion 

Even if your business does not have a physical presence in Canada, you may have tax obligations. This is especially true for digital services providers and facilitation platforms. However, keeping up with these fast-moving legislation changes and ensuring compliance can be daunting. Ultimately, you need to understand the laws of PST in Canada in order to remain compliant. If you think you may be at risk of tax non-compliance in Canada, get in touch with a vatglobal consultant today at info@vatglobal.com

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