Canada: Retail sales tax measures clarified for online platform operators (Manitoba)

New retail sales tax responsibilities in Manitoba for online platform operators and online sellers

Retail sales tax measures clarified for online platform operators in Manitoba

New guidance provided in a bulletin clarifies some of the new retail sales tax responsibilities in Manitoba for online platform operators and online sellers.

The retail sales tax (RST) measure is effective for online platform operators effective 1 December 2021. In general, the new rules apply to operators of online sales platforms (e.g., marketplaces) that facilitate the retail sales of goods in the province and that collect the payment on behalf of the online sellers (regardless of whether the operators are located inside or outside the province). Similar rules also apply for online accommodation platforms. Operators of online sales platforms and of online accommodation platforms therefore must register, collect and remit retail sales tax on taxable retail sales made through their platforms. Read TaxNewsFlash

The guidance states that operators of qualifying online sales platforms must collect and remit Manitoba's retail sales tax on all taxable retail sales facilitated through their platforms. Online sellers will not have to remit retail sales tax on retail sales of such goods, as long as the online platform operator has collected and remitted the retail sales tax.

The guidance also clarifies application of the retail sales tax rules for providers of streaming services and other media services, which may also have to register for, collect, and remit retail sales tax on these services as of 1 December 2021. 

KPMG observation

While the guidance in Manitoba’s bulletin resolves some ambiguity regarding who must collect and remit the retail sales tax on taxable retail sales made through online sales platforms (at least from an administrative point of view), there remains some uncertainty for non-commercial goods imported into Manitoba from outside Canada. Currently, the Canada Border Services Agency (CBSA) collects the retail sales tax on non-commercial goods imported into Canada, under an agreement with Manitoba. The new guidance does not address situations when retail sales tax may be collected by both the online platform operator and by the CBSA.

Read a December 2021 report [PDF 185 KB] prepared by the KPMG member firm in Canada

 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.