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E-Commerce Businesses – Do you need to be registered for GST/HST?

( Disponible en anglais seulement )

8 juillet 2021 | Ron Choudhury, Colleen Ma

Effective July 1, 2021, major changes to the GST/HST regime as it relates to e-commerce and the digital economy came into effect. We previously reported on these measures when they were first announced in the Fall Economic Statement 2020 and in our Budget 2021 update.

Businesses involved in e-commerce transactions may now need to be registered for, collect, and remit GST/HST under the normal regime or under the new simplified regime. The GST/HST rate varies between 5% and 15%, depending on the province in which the supply is made.

  • Digital Products or Services (both digital and traditional). Non‑resident vendors, and non‑resident distribution platform operators, that supply digital products or services may now be required to register under the new simplified GST/HST registration regime. The new simplified registration portal went “live” in late June 2021.
  • Goods Supplied Through Fulfillment Warehouses. Non-resident vendors, and non‑resident distribution platforms, who make supplies of goods that are located in a fulfillment warehouse in Canada, or shipped from a place in Canada to a purchaser in Canada, may now be required to be registered under the normal GST/HST registration regime. Our previous article about what a non‑resident vendor of goods needs to know about Canadian sales tax has more information.
  • Third-party Fulfillment Warehouses. Fulfillment businesses operating in Canada should already be registered for GST/HST. In addition, they are now required to notify the CRA that they are carrying on such a business. Fulfillment warehouses must also maintain records “containing information specified by the Minister” regarding their non‑resident clients and the goods they store on their behalf.
  • Short-Term Accommodation Suppliers and Platforms. A supplier of short‑term accommodation in Canada may now need to be registered under the normal GST/HST regime. An accommodation platform operator that facilitates such supplies may now need to be registered under the simplified GST/HST regime.

Budget 2021 stated that there will be a 12‑month “transition period” for businesses that have taken reasonable steps to comply with these measures, but are unable to meet their obligations, and that the CRA will take a “practical approach” to compliance.

Provincial Sales Tax

There have also been changes to provincial sales tax legislation in British Columbia, Saskatchewan and Quebec over the last few years. Further, the 2021 Manitoba Budget announced that changes aimed at streaming services, online marketplaces, and online accommodation platforms will be effective December 1, 2021, but details have not been published. Businesses with customers in British Columbia, Saskatchewan, Manitoba and Quebec should review their operations to ensure they are compliant with the current rules and monitor developments in Manitoba.

Need Assistance?

If you have any questions about Canadian sales tax registration, or your obligation to collect and remit Canadian sales tax, contact a member of the Miller Thomson LLP Sales, Commodity and Indirect Tax Group.

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