Canada: New GST/HST rules for non-resident businesses, effective 1 July 2021

Non-resident businesses need to review new GST/HST rules that are effective 1 July 2021

Non-resident businesses need to review new GST/HST rules that are effective 1 July 2021

Non-resident businesses located outside of Canada face new GST/HST* rules beginning 1 July 2021.

*GST/HST = goods and services tax / harmonized sales tax

To prepare for these rules, affected non-resident businesses that sell products or services to Canadian customers but do not conduct business in Canada need to review their upcoming GST/HST obligations. These obligations depend on the specific circumstances of each business, including whether:

  • The business makes taxable supplies of intangible personal property (IPP), services or qualifying tangible personal property (goods)
  • The taxable supplies are facilitated through platform operators that are deemed to be making these taxable supplies
  • The business is currently registered under the normal GST/HST registration rules
  • The business is required to be registered under the new GST/HST rules, and if so, whether the business must register under the current normal GST/HST registration rules or the new simplified GST/HST registration system

KPMG observation

Businesses need to review the new GST/HST rules and adjust their systems accordingly. In addition, non-resident businesses need to be prepared to respond to requests for information from platform operators that are also preparing for these new GST/HST rules. Similar rules apply for Quebec sales tax (QST) purposes.

Read a June 2021 report prepared by the KPMG member firm in Canada

 

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