Source
r/cantax•
adrade

GST/HST rules when selling to resellers...

I honestly don't know why I am having so much trouble finding this information online and even ChatGPT gave me a vague answer that wasn't much help. The CRA's website doesn't make anything any clearer.

I am in Ontario and almost all of my customers are resellers with their own GST or PST accounts with the CRA or provincial governments. I am fairly certain that the GST portion (5%) always has to be charged and the my customers can recover that with input tax credits, but I am completely confused when it comes to sorting out provincial rules.

I used to live and work in the US, and there, it's really simple: if you have a resale certificate from your customer, you simply don't charge sales tax. Here, there's already this hybrid model which is really confusing between the federal and provincial governments - some participate in HST, some don't, and everyone seems to have their own way of doing it.

I was able some time ago to get in touch with someone in the BC government who confirmed for me that as long as the reseller is registered in BC for PST, I do not need to charge their PST. So, I at least have BC down, and Alberta is easy since there's no provincial sales tax. However, what about every other province? What about for the combined HST provinces?

I tried calling the CRA for help today, but of course because of the strike, all hotlines are down. Does anyone have any guidance here on how to proceed? Is there any grid published anywhere that provides guidance on handling sales to resellers registered themselves for GST/HST/PST accounts?

Posted May 3, 2023, 2:58 PM UTC · edited

16
tbcwpg•

HST you would charge in provinces that are part of that program. So Ontario at 13%, New Brunswick/PEI/Nova Scotia/Newfoundland 15%. HST is an agreement between the federal government and the provinces participating in the Harmonized program (the H in HST) where the federal government administrates it for those provinces.

As for Saskatchewan and Manitoba, I'm not 100% but I assume it's the same as BC. Quebec has its own rules.

1
adradeOP•

Thank you.... I guess I can mark the HST provinces off my list then, which is helpful for the invoice I'm currently working on actually. Now, to figure out all the others.

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FredWongCPA•

I can confirm SK, MB, and QC has same rules as BC.

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adradeOP•

So, no need to charge the provincial portion to resellers in those provinces registered to collect the provincial portion themselves?

1
FredWongCPA•

Correct.

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wearing_shades_247•

I think this is what you are looking for: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-collect-place-supply.html You need to figure out what the place of supply is. If you are dealing in physical goods, check your contracts for where the goods are FOB.

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