Sales Tax - E-Commerce Platforms, NRI's, etc.

Colleen Ma & Satinder Bains were present at CSCB's annual conference in Calgary to share new rules and tax obligations that apply to marketplace facilitators, such as e-commerce platforms, in Canada, particularly for the sale of goods through these platforms.

Their presentation overviewed the need for businesses, including those outside Canada, to understand how these rules affect their GST/HST responsibilities and how they should assist clients, particularly importers.

Marketplace facilitators, also referred to as distribution platform operators, must now adhere to new tax rules introduced in 2021. These rules were implemented to address gaps in tax collection, where the value of GST/HST applied to goods sold by non-resident, unregistered sellers was lower than the final sale price. This created a tax gap, which the new rules aim to eliminate by requiring e-commerce platforms to collect and remit GST/HST on behalf of these sellers. The focus is on ensuring the fair application of taxes on imported goods, regardless of whether they are sold by registered or unregistered sellers.

Their presentation explained how platforms must register for GST/HST and assume the tax obligations of the sellers using their platform. These rules ensure that goods shipped to Canadian consumers are taxed appropriately based on the destination and type of goods, with the platform acting as the intermediary responsible for collecting the taxes.

They also touched on the implications for businesses that store goods in Canadian warehouses before selling them domestically. Non-resident businesses must be mindful of their tax obligations when selling in Canada, especially if they use e-commerce platforms.

Colleen & Satinder also briefly covered tax reporting requirements, such as the need to claim input tax credits (ITCs) and the different registration thresholds across provinces, emphasizing the importance of understanding both federal and provincial tax regulations.

Their presentation time slot immediately followed 'Global Markets - What's New in E-commerce' opening the door to countless questions......