We work with a lot of consultants and the question often comes up “Do I need to charge GST / HST on my consulting services that I perform for clients in another country (usually the USA)?”
The simple answer is no!
In Canada, the Canada Revenue Agency deems the place of supply for services to be the location that your client is based even if you perform the work remotely (in Canada). However, there are some exemptions and it does depend on the type of service you are providing.
On the Canada Revenue Agency website, they clearly indicate that most goods and services for which you charge and collect GST/HST in Canada are zero rated when exported.
There are two important considerations that you should make. the Canada Revenue Agency has deemed them to be ZERO rated not EXEMPT.
“GST exempt or zero rated – Both are 0% – aren’t they, so what?”
Well, when supplies are exempt like many medical/dental services are, the business CANNOT then claim the GST / HST paid on any supplies in providing those services. If the service is zero rated then you can claim any GST / HST paid on your own supplies that you incur in providing those services.
What do you need to do? Well, if you provide taxable supplies (services) to non-resident companies or individuals and you hit the minimum threshold of $30,000 in worldwide taxable sales, then you need to register for GST/HST. However, if all your services are zero rated – you may be getting a refund with each filing.
We recommend you check out the rulings to see where your type of service fits as some have different requirements and to determine your “place of supply”. See links and sources here.
Or, give us a call and we can help you sort it out.
Virtual Heights Accounting is a CPA firm that operates in the virtual world. We provide virtual accounting, tax, Virtual CFO and Controller services for your growing Company. Contact us at www.vhaccounting.ca/contactus or follow our blog on your chosen social media source. This blog is intended for general use and understanding and does not replace direct professional advice.