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 GST
in Depth.
Goods
imported into Canada are subject to the Goods and Service Tax (GST)
or the Harmonized Sales Tax (HST). The GST was implemented in Canada
on January 1, 1991. The GST/HST is a tax on final consumption,
however, unlike a retail sales tax, the GST/HST has a multistage
collection process.
GST is applied at the border to all imported Commercial goods destined or supplied
to all provinces within Canada. In turn you will also collect the
GST from your Canadian customers by billing them GST Sales Tax on your invoice
to them. All Firms with (Canadian) annual sales exceeding $30,000 must register
and must post a GST Bond. You will be issued a Business Number (BN) with
an annex code of “RT” for GST and “RM” for importing.
Remember, even if you do not need to register for GST you must still register
for a BN
for importing into Canada, which will include an annex code of RM for importing
only.
Registered firms collect the GST on the sale in Canada of taxable goods and services
supplied to all provinces with the exception of New Brunswick, Nova Scotia or
Newfoundland at a rate of 7%. Registered firms collect the HST on the sale in
Canada of taxable goods and services supplied and destined to New Brunswick,
Nova Scotia and Newfoundland at a rate of 15%. After registering you would prepare
and submit a GST return quarterly showing the amount of tax you charged and the
amount of tax you paid. If the amount of GST charged is greater than the amount
you paid, the difference would be owed to the Government of Canada. If the amount
of GST paid is larger, you could claim a refund. Transborder shipping costs are
not subject to the GST/HST.
The GST does not form a part of your cost when developing Canadian wholesale
pricing. NRI will help make becoming a GST Registrant and collecting the tax
a painless and understood process.
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