You are obligated to charge your Canadian customers GST/HST sales tax when all of these are true: You carry on business in Canada. You sell taxable supplies. You are not a small business supplier.
Do I need to collect sales tax for Canada?
Most businesses in Canada have to collect the goods and services tax (GST) or the harmonized sales tax (HST). The HST is applied in provinces that have harmonized their sales tax with the federal government’s GST.
Do Canadian customers pay US sales tax?
If your customers are in Canada you should charge HST or GST + applicable PST based on your customer’s location. If your customers are outside of Canada then you don’t need to charge Canadian sales tax. If your customers are in the US you likely do not need to charge US sales tax unless you have a “Nexus” (ie.
Do I need to charge GST to foreign clients Canada?
GST With Foreign Clients
As a general rule, goods that are exported outside of Canada and services rendered to non-residents are zero-rated under the GST/HST rules. This means that they’re technically taxable, but at a rate of 0%, you don’t have to charge anything.
Do Canadian companies need to collect US sales tax?
Canadian businesses operating in or selling to the United States may be subject to income taxes in the US or they may also need to pay US sales tax. Whether a Canadian startup is subject to US taxes depends on whether it has “nexus” in the US.
Do I charge sales tax to international customers?
Like all clients who make purchases in person at brick-and-mortar retail establishments, an international customer must pay all applicable state, county or municipal sales taxes levied in the merchant’s location.
How much tax do I charge my customers?
The sales and use tax rate varies depending where the item is bought or will be used. A base sales and use tax rate of 7.25 percent is applied statewide. In addition to the statewide sales and use tax rate, some cities and counties have voter- or local government-approved district taxes.
Do I charge sales tax when selling to Canada?
But this doesn’t mean that if you sell into Canada your obligations are simple. Canada charges a Goods and Services Tax (GST), which in some provinces combines with a Provincial Sales Tax (PST) to produce a Harmonized Sales Tax (HST). The GST solely applies in Alberta, Northwest Territories, Nunavut and Yukon.
Do I charge tax on shipping in Canada?
A supply, including a supply of a freight transportation service, that is made in Canada is subject to the GST at the rate of 5% or subject to the HST at the applicable harmonized rate, unless it is zero-rated (taxable at 0%) or exempt. … Generally, international freight transportation services are zero-rated.
How do Canadian taxes compared to US taxes?
Federal Income Taxes
In Canada, the range is 15% to 33%. In the U.S., the lowest tax bracket for the tax year ending 2019 is 10% for an individual earning $9,700 and jumps to 22% for those earning $39,476.
Do I charge sales tax on digital products?
The “sale of electronic data products such as software, data, digital books (eBooks), mobile applications and digital images is generally not taxable” (though if you provide some sort of physical copy or physical storage medium then the sale is taxable.)
Do I charge US clients GST?
You do not charge your U.S. clients GST or HST or PST. As foreign customers, they are zero rated. You can still deduct GST/HST on Canadian expenses related to the sales if you are registered.
Should a US company charge sales tax to a Canadian company?
So, when are you obligated to charge federal sales taxes on your orders from the U.S. to Canada? To sum it up, if your e-commerce business is not a small business supplier AND does carry on business in Canada, then you are obligated to register for a federal GST/HST sales tax account.
How do you handle sales tax when selling online?
The basic rule for collecting sales tax from online sales is:
- If your business has a physical presence, or “nexus”, in a state, you must collect applicable sales taxes from online customers in that state.
- If you do not have a physical presence, you generally do not have to collect sales tax for online sales.
Does a foreign company need to pay sales tax?
Foreign companies must comply with sales tax in much the same manner US based remote businesses. … Businesses, both in the US and outside our borders, are responsible for collecting sales tax in the states in which they have established nexus.