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Canadian Sales Tax and Customs Rules, Cash Flow Improvement (Refund) Opportunities and Planning Considerations

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Monday, February 5, 2024

Recorded event now available

or call 1-800-926-7926

This course will provide tax professionals and advisers with guidance on the challenges of Canadian sales tax as applied to U.S.-based sellers. The panel will discuss Canada's Goods & Services Tax/Harmonized Sales Tax (GST/HST), Quebec Sales Tax (QST) and provincial sales tax (PST), applicable rules, registration requirements for non-residents, the small supplier exception, common errors (including refundable overpaid taxes that can help improve cash flow), and other critical items for U.S.-based sellers.

Description

With more than $480 billion of trade to Canada, a large portion of purchases by Canadians are from U.S. vendors and almost all these sales have tax implications. Tax professionals need a complete understanding of the Canadian sales tax regime to avoid any unintended liabilities for U.S.-based sellers.

U.S.-based businesses providing property or services in Canada may need to register and obtain a Canadian Business Number. Canada applies sales taxes on the sale of certain real/tangible/intangible property as well as services based on "place of supply" rules that determine the province of supply. The GST/HST is the federal sales tax that applies at one rate or another on supplies made throughout Canada with rates that range between five percent and 15 percent. Some provinces also impose a PST in addition to the base five percent GST, which may require businesses to register and remit the PST separately for a given province.

Under certain circumstances, a U.S.-based business may not be required to transact Canadian sales tax. For instance, some may not be viewed as carrying on business in Canada (a nexus test equivalent) while others may qualify for the small supplier exception or may be engaged in providing certain types of property and services that are zero-rated or exempt from Canadian sales tax. Tax professionals must recognize crucial issues under applicable tax laws and registration requirements that can minimize overpayment of tax and even provide lucrative cash flow improvements in the form of rebates and input tax credits.

The global trade landscape continues to evolve, and Canada is implementing new programs and revised legislation in response. Failure to understand your responsibilities when acting as Importer of Record into Canada could result in the overpayment of duties and taxes, monetary penalties, increased searches at the border and even denial of entry of goods.

Listen as our panel discusses Canada's GST/HST, QST and PST, as well as compliance challenges for U.S.-based sellers.

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Outline

  1. An overview of the Canadian Sales Tax System
  2. Deep Dive into GST/HST, QST, and PST - including digital economy rules
  3. CBSA Assessment and Revenue Management (CARM) and the impacts of Bill S211
  4. Strategic Insights on Common Errors and Refund Recovery Opportunities
  5. Compliance challenges and best practices/tips and tricks for U.S.-based businesses

Benefits

The panel will discuss these and other key issues:

  • What are the GST/HST, QST, and PST taxes? How are they applied to sales by U.S.-based companies?
  • What are the nexus standard equivalents (referred to as "carrying on business in Canada") for non-residents of Canada?
  • What are the Canadian sales tax registration requirements (simplified vs. regular)?
  • What are the most common errors that trip up non-residents that are selling into Canada which can trigger audits and examinations by the tax authorities?
  • What compliance challenges do many non-residents encounter?
  • Are you prepared to meet your obligations as an Importer of Record into Canada?

Faculty

Cho, Jae
Jae Hyung Cho
Senior Manager
BDO Canada

Mr. Cho is a dedicated Tax Professional with expertise in Indirect Tax with over eleven years of work...  |  Read More

Goddeeris, Charmaine
Charmaine Goddeeris, CCS
Director
BDO Canada

Ms. Goddeeris is a Director in BDO's Customs & International Trade practice with over 20 years of professional...  |  Read More

Martikainen, Peter
Peter Martikainen, CPA, CMA
Senior Manager
BDO Canada

Mr. Martikainen is a Senior Manager, Indirect Tax Recovery at BDO Canada.  

 |  Read More
Tulsani, Jay
Jay Tulsani, CPA, CMA
Senior Manager
BDO Canada

Mr. Tulsani is a Senior Manager, Indirect Tax at BDO Canada based in Toronto, Ontario.

 |  Read More

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