Canada: Requirement to provide GST/HST registration numbers to non-resident suppliers, platform operators
Non-resident businesses and platform operators are requesting GST/HST and QST registration numbers from customers in Canada.
Requirement to provide GST/HST registration numbers to non-resident suppliers
Businesses in Canada need to be prepared to provide their GST/HST and QST* registration numbers to satisfy requests from their non-resident suppliers.
Under new GST/HST rules (effective 1 July 2021), businesses in Canada that do not provide their GST/HST registration number may be liable for GST/HST to non-resident businesses and platform operators. Further, businesses may not be able to claim input tax credits (ITC) for these taxes under a new specified GST/HST registration system.
*GST/HST and QST = goods and services tax / harmonized sales tax and Quebec sales tax
Based on the new GST/HST rules, certain non-resident businesses and many foreign platform operators must register under a new simplified GST/HST registration system. These businesses and platform operators are required to collect and remit GST/HST on certain sales of taxable services or intangible personal property (IPP) to Canadian customers that have not provided their GST/HST registration number, or when they facilitate such sales.
Further, businesses in Canada cannot claim ITCs for GST/HST paid to entities registered under the new simplified GST/HST registration system, even if the business is engaged exclusively in commercial activities. Similar rules apply for QST purposes.
Businesses in Canada can expect these requests from their suppliers and need to be ready to share their GST/HST and QST registration numbers to avoid liability for tax under the simplified rules.
Businesses need to carefully review whether certain non-resident suppliers have started to collect GST/HST effective 1 July 2021 and determine whether these suppliers are registered under the new simplified GST/HST registration system. The Canada Revenue Agency cannot refund taxes collected by a supplier registered under the simplified rules.
Read an August 2021 report prepared by the KPMG member firm in Canada
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