Canadian Tax question

[RagingBITCH]

Random question - one of our clients wants to sell to Canadian customers. Their website will display everything in US dollars. Are we able to charge the associated GST/PST/HST (if applicable) based on the amount of the item in US dollars? Is that legal first off, or will some conversion have to take place of the item from US --> CA dollars before we charge the Canadian taxes? Thanks

EDIT: Product A is $100 in US

We'd calculate taxes and show:

GST: $10 (in US)
PST: $5

Total: $115 in US

Their bank would take care of the conversion from US to Canadian dollars

 

[sdifox]

If you charge the taxes in US funds, exchange is not your problem.

 

[Mike Gayner]

You can sell in whatever currency you want, but it's safer for you to sell in your native currency. If you sell in Canadian currency, any movement between sale and payment will be a taxable gain/loss.

If you don't have a permanent Canadian base you wont have to pay Canadian income taxes. Sales taxes, if any, will be in Canadians dollars.

 

[RbSX]

Random question - one of our clients wants to sell to Canadian customers. Their website will display everything in US dollars. Are we able to charge the associated GST/PST/HST (if applicable) based on the amount of the item in US dollars? Is that legal first off, or will some conversion have to take place of the item from US --> CA dollars before we charge the Canadian taxes? Thanks

EDIT: Product A is $100 in US

We'd calculate taxes and show:

GST: $10 (in US)
PST: $5

Total: $115 in US

Their bank would take care of the conversion from US to Canadian dollars

Here's how it works, if your client is in the states and wants to sell to someone in Canada, you do not have to charge any GST or PST.

 

[RagingBITCH]

Mike/RbSX - they have several hundred stores (physical presence) in Canada...as well as several thousand stores here in the US. We would be forced to charge tax to the CA customers since they have B&M/presence there, correct?

And back to the original question - so we'd be fine charging them taxes based on the US price and in US dollars, and then they would be on the hook later on down the line at the end of the year for any taxable gain/losses due to the conversion?

 

[yh125d]

Canada has taxes? On what, hockey tickets?



Molson?



Maple Syrup?



Moose feed?

 

[sandorski]

Convert then Tax

I'm no Lawyer/Accountant though, but it seems to me that if you're not sure, take the safest route.

 

[RbSX]

Mike/RbSX - they have several hundred stores (physical presence) in Canada...as well as several thousand stores here in the US. We would be forced to charge tax to the CA customers since they have B&M/presence there, correct?

And back to the original question - so we'd be fine charging them taxes based on the US price and in US dollars, and then they would be on the hook later on down the line at the end of the year for any taxable gain/losses due to the conversion?

Interesting question, the long story is that they would need to develop two independant sites.

One for the Canadian market, another for the US market.

For example: If you buy from New Egg and live in a state where they are a physical registered business, you have to pay state tax, and federal tax.

It's the same here in Canada.

The customer depending on where they are based out of is going to have to charge taxes based on where they are based in canada. Taxes have to be based on post conversion dollars.

 

[FuzzyDunlop]

Canada has taxes? On what, hockey tickets?



Molson?



Maple Syrup?



Moose feed?

Canola Oil, and the number of wheat seeds in possession.

Federal Government has a 5% sales tax.
Provincial governments each have thier own sales taxes - but not alberta.
Canadians have a pretty high tax rate BUT they have free healthcare and decent social services.

 

[lurk3r]

Canada has taxes? On what, hockey tickets? Yep GST on all services, 10% now?



Molson? Mostly taxes, I'd say 52% based off the $36 at the beer store vs $18 at the duty free



Maple Syrup? a Product, so 15%



Moose feed? Meeces eat swampwompkie, its free, can't tax free

To charge taxes you'd have to get a tax number from the federal govt, and possibly one from each province. Usually taxes/duties are just calculated at the border and added to the shipment cost (I've gotten lots of bills from DHL for taxes and duties)