GST: Do Non-Residents Rendering in Canada need to Register?

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The General Rule

As a general rule, every taxable supply made in Canada is subject to Goods and Services Tax (GST). For tangible property, supply is considered to have been made in Canada if it is delivered or made available in Canada to a customer. For services, the supply is considered to have been made in Canada if it is performed in whole or in part in Canada. If you conclude that your taxable supply was not made in Canada, then there is no need to register for GST. If you conclude that your taxable supply was made in Canada, keep reading to find out if the “non-resident override rule” applies.

The Non-Resident Override Rule

There is a “non-resident override rule”, which may override your requirement to register for GST under the general rule set out above. This rule provides that a supply made by an unregistered non-resident is not considered to be made in Canada unless the supply is made in the course of a business carried on in Canada:

Carrying on Business in Canada: Canadian law does not provide rules as to what constitutes carrying on business in Canada. Therefore, the only guidance offered is common law jurisprudence and administrative pronouncements by the Canada Revenue Agency (CRA).

To help you determine whether you are carrying on business in Canada, CRA was kind enough to list 12 factors that it considers in evaluating whether a supply is made in the course of a business carried on in Canada:

  • The place where agents and employees of the non-resident are located;
  • The place of delivery;
  • The place of payment;
  • The place where purchases are made or assets acquired;
  • The place from which transactions are solicited;
  • The location of assets or an inventory of goods;
  • The place where business contracts are made;
  • The location of a bank account;
  • The place where a non-resident’s name and business are listed in a directory;
  • The location of a branch or office;
  • The place where the services are performed; and
  • The place of manufacture or production

The CRA goes on to say that the importance or relevance of a given factor in a specific case depends on the nature of the business activity under review, and, as always, the particular facts and circumstances of each case. Based on your analysis, you will need to decide whether you have a significant presence in Canada sufficient to conclude that you will be carrying on business in Canada for GST purposes.

Conclusion: If you conclude that you are considered to be carrying on a business in Canada, you will need to register to GST purposes and will be responsible for collecting the GST on you Canadian sales. You will also be eligible to claim input tax credits for GST paid on its Canadian expenses. Note that a non-resident registering with CRA for GST may be required to provide a security deposit.

Need Help?

We have expertise in assessing GST filing requirements for non-residents rendering services in Canada. Contact us for a free consultation regarding your GST situation:

UHY Victor LLP Canada U.S. Tax Team
(514) 282-0067

UHY Victor Response to the Spread of COVID-19

UHY Victor is taking action to maintain the health and welfare of our team, our clients and support communal efforts to respond to the coronavirus pandemic.

UHY Victor will remain open during this difficult period and client services will continue. We have implemented contingency plans which allow us to continue to operate as we all deal with the spreading pandemic.

In light of the present situation we have introduced the following measures:

  • Our staff and procedures have been structured so that our team can work remotely.
  • Our IT infrastructure and data are protected by cutting edge security systems.
  • To the extent possible, client meetings will be held through web meetings and other remote solutions.
  • Employees who experience the primary symptoms such as fever, cough and respiratory difficulties will work remotely until cleared.
  • Internally, we emphasize the importance of “social distancing”, and have enhanced our internal cleaning and disinfecting protocols.

UHY Victor will continue to monitor the changing situation and, will respond proactively as this major health challenge evolves.

We encourage all to stay informed and to visit the Public Health Agency of Canada COVID-19 site, and follow the guidelines set out by the government of Canada:

  • Now and always during cold and flu season, stay home if you are sick. Encourage those you know are sick to stay home until they no longer have symptoms.
  • Since respiratory viruses, such as the one that causes COVID-19, are spread through contact, change how you greet one another. Instead of a handshake, a kiss or a hug, a friendly wave or elbow bump is less likely to expose you to respiratory viruses.
  • Practice frequent hand hygiene and coughing and sneezing etiquette. Clean and disinfect frequently touched objects and surfaces, such as toys and door handles.

For more information on the guidelines of the Government of Canada on how to be prepared for COVID-19: Click here.

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