What is Canadian sales tax?
The Goods and Services Tax (GST) is applied to most goods and services sold or provided in Canada. In New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Prince Edward Island, the GST has been integrated with the Provincial Sales Tax (PST) to form the Harmonized Sales Tax (HST). PST, like QST (Quebec’s version of PST), is a provincial tax collected on most goods and services sold or provided in the respective provinces. The rates vary from 5% to 15%, depending on the applicable tax jurisdiction.
Marketplaces such as Etsy and Amazon handle the remittance of Canadian sales tax on your behalf on the transaction between you and your customers. Websites such as Shopify do something similar by providing tax collection services that remit on your behalf.
How does this affect Artelo artists?
These taxes are automatically applied to transactions with Artelo based on the transaction value and the destination province of the order. Artelo collects these taxes and remits them to the Canadian government to ensure compliance for importing. Artelo shipments from the US to Canada should not be charged duties as per USCMA since our products are produced within the United States.
*Note: If the transaction's value between your business and your customer exceeds $40, CAD, GST/HST, and QST/PST are charged based on the destination province in Canada.
Can you recover some of the sales tax paid?
Yes, it's quite straightforward! Non-resident businesses operating in Canada have the option to register for a Canadian non-resident import number (NRI) to reclaim the GST (Goods and Services Tax) paid, thus reducing your annual sales tax liabilities. Artelo offers an end-of-year summary to facilitate GST credit claims. Additionally, Artelo has recently formed a partnership with a Canadian sales tax firm that can assist with your registration with the Canadian tax authorities and handle your annual filings for a nominal fee. All you need to do is provide them with Artelo's end-of-year CA tax summary, and you can reclaim that year's Income Tax Credits (ITCs). For assistance in setting up tax compliance within Canada, feel free to reach out to Artelo. We generally recommend registering for Canadian Sales Tax to recover taxes paid on transactions shipping into Canada.
Rip Technologies LLC, operating as Artelo, and its affiliates do not offer tax, legal, or accounting guidance. The content presented here is solely for informational purposes and should not be considered a source of tax, legal, or accounting counsel. It is imperative that you seek advice from your own tax, legal, and accounting advisors before proceeding with any transactions.