Do you need to be charging sales tax on your sales?
Depending on what you’re selling and where you’re selling it, the answer may very well be YES.
Here’s the quick and dirty:
Step 1: Determine if your sales are taxable, zero-rated, or exempt where you are selling them in Canada. Check out this resource.
Step 2: Consider where the products and services are being sold/delivered TO (not where you are selling FROM). What is the place of supply? Think about where your customer will receive the product or service. This impacts your sales tax requirements. Products sold to different provinces and territories will have different sales tax requirements. Side note - sales to status holders on reserve will also have different requirements. Understand where your end customers are AND talk to a pro accountant (a CPA)!
Step 3: Track sales for each province/territory where you are selling to customers. There are $ thresholds for each province/territory that you are selling to. Once you understand the requirements and dollar thresholds, track your sales by jurisdiction and monitor these on a monthly basis!
Step 4: Register for sales taxes once you:
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- meet the requirements (steps 1 and 2) and
- meet the thresholds (step 3)
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If you are selling online, this may mean that you need to register for sales taxes in SK, MB, BC, QC, and federal! Phew!
If you are selling products on reserve to status holders, your customers may be exempt. Understand these requirements and the documentation you need to ask for and retain if this is the case. You can find a starting point here: GST/HST and Indigenous peoples.
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Sales tax is tricky and very nuanced. If you are unclear of your obligations and reporting requirements, reach out to a professional accountant to talk through your specific business requirements.
We work with clients selling products across the country and are experts in supporting clients with their sales tax needs. Reach out at hello@modaccounting.ca to chat about your needs and how we can help! ☕️🎉😎