Canadian Sales Tax and Customs Rules, Cash Flow Improvement (Refund) Opportunities and Planning Considerations

With more than $480 billion of trade to Canada, a large portion of purchases by Canadians are from U.S. vendors and almost all these sales have tax implications. Tax professionals need a complete understanding of the Canadian sales tax regime to avoid any unintended liabilities for U.S.-based sellers.

U.S.-based businesses providing property or services in Canada may need to register and obtain a Canadian Business Number. Canada applies sales taxes on the sale of certain real/tangible/intangible property as well as services based on "place of supply" rules that determine the province of supply. The GST/HST is the federal sales tax that applies at one rate or another on supplies made throughout Canada with rates that range between five percent and 15 percent. Some provinces also impose a PST in addition to the base five percent GST, which may require businesses to register and remit the PST separately for a given province.

Under certain circumstances, a U.S.-based business may not be required to transact Canadian sales tax. For instance, some may not be viewed as carrying on business in Canada (a nexus test equivalent) while others may qualify for the small supplier exception or may be engaged in providing certain types of property and services that are zero-rated or exempt from Canadian sales tax. Tax professionals must recognize crucial issues under applicable tax laws and registration requirements that can minimize overpayment of tax and even provide lucrative cash flow improvements in the form of rebates and input tax credits.

The global trade landscape continues to evolve, and Canada is implementing new programs and revised legislation in response. Failure to understand your responsibilities when acting as Importer of Record into Canada could result in the overpayment of duties and taxes, monetary penalties, increased searches at the border and even denial of entry of goods.

Listen as our panel discusses Canada's GST/HST, QST and PST, as well as compliance challenges for U.S.-based sellers.

1. An overview of the Canadian Sales Tax System
2. Deep Dive into GST/HST, QST, and PST - including digital economy rules
3. CBSA Assessment and Revenue Management (CARM) and the impacts of Bill S211
4. Strategic Insights on Common Errors and Refund Recovery Opportunities
5. Compliance challenges and best practices/tips and tricks for U.S.-based businesses

The panel will discuss these and other key issues:

• What are the GST/HST, QST, and PST taxes? How are they applied to sales by U.S.-based companies?
• What are the nexus standard equivalents (referred to as "carrying on business in Canada") for non-residents of Canada?
• What are the Canadian sales tax registration requirements (simplified vs. regular)?
• What are the most common errors that trip up non-residents that are selling into Canada which can trigger audits and examinations by the tax authorities?
• What compliance challenges do many non-residents encounter?
• Are you prepared to meet your obligations as an Importer of Record into Canada?

Learning Objectives

After completing this course, you will be able to:

• Identify the differences between Canada's tax system and the United States' system for purposes of sales taxes
• Understand the nexus standards for U.S.-based companies doing business in Canada
• Ascertain methods to overcome key issues of Canada's GST, PST, and HST taxes as applied to U.S.-based companies
• Recognize the registration requirements and compliance challenges for Canada's sales taxes
• Identify exceptions and what products or services are exempt from Canadian sales taxes

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules, supervising other preparers/accountants. Specific knowledge and understanding of foreign information reporting requirements, including FATCA and FinCEN Form 114; familiarity with foreign income sourcing rules and tax treaty provisions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).