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  1. #1

    Canada: GST Rules?

    I am a Canadian business owner who sells a downloadable software product online. Am I correct in thinking that I need to charge GST only to customers who order the product from Canadian billing addresses?

    The software is for download only, so I am not shipping a tangible product to anyone.

    All the rules seem so sketchy on this and all I can find is a few posts where people have said that they have called the Canada Revenue Agency and they said X, Y and Z but I would feel more comfortable if I could find something from an actual CRA publication.

    I've also heard that the billing/shipping address are irrelevant and that it only matters whether or not an item is delivered to a Canadian address. But do downloads ever qualify as a "delivery"?

    Any advice?

  2. #2
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    As soon as your income is $30K+, you need to charge GST to your Canadian clients.
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  3. #3
    Join Date
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    GST is applicable for all transactions to Canadians (if you are planning to gross more than 30k annually as Dan stated).

    If you are in Ontario (you didn't specify), PST doesn't have to be charged unless you are offering a hard copy of said product, such as a CD.

    The taxes would only be applicable to consumers verified as Canadian residents, so you would most likely use their billing address as best-guess.

    Of course, I am not an accountant so you would be best to contact one.
    This PDF might help.
    http://www.rev.gov.on.ca/english/guides/rst/pdf/651.pdf

  4. #4
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    Quote Originally Posted by sTag-Dan View Post
    As soon as your income is $30K+, you need to charge GST to your Canadian clients.
    You don't need to pay in taxes ONLY if you are registered as a small business and make less than $30,000 a year. At least, that is my understanding.
    Last edited by larwilliams; 03-30-2008 at 11:56 PM. Reason: clarification
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  5. #5
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    Aug 2006
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    Regina, Saskatchewan, CA
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    Though I know this is sort of obscure, you might want to have a look at whether or not you can charge GST to a provincial government. Some provinces have agreements with the federal government regarding GST.
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  6. #6
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    Quote Originally Posted by BillBrown View Post
    Though I know this is sort of obscure, you might want to have a look at whether or not you can charge GST to a provincial government. Some provinces have agreements with the federal government regarding GST.
    Can you expand on this a little? I realize you are in SK so the provincial laws may be different there as opposed to Ontario?

    GST is collected and remitted to the CRA. I don't collect PST but I'm sure it is remitted to the Minster of Finance of your province?

  7. #7
    Join Date
    Aug 2001
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    Quote Originally Posted by Adam-AEC View Post
    GST is applicable for all transactions to Canadians (if you are planning to gross more than 30k annually as Dan stated).

    If you are in Ontario (you didn't specify), PST doesn't have to be charged unless you are offering a hard copy of said product, such as a CD.

    The taxes would only be applicable to consumers verified as Canadian residents, so you would most likely use their billing address as best-guess.

    Of course, I am not an accountant so you would be best to contact one.
    This PDF might help.
    http://www.rev.gov.on.ca/english/guides/rst/pdf/651.pdf
    This is pretty spot on.

  8. #8
    Join Date
    Aug 2006
    Location
    Regina, Saskatchewan, CA
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    221
    Saskatchewan provincial governments don't pay GST due to an agreement they have with the federal government -- they don't tax each other.
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    http://www.LiveGlobalBid.com

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