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Old Apr 11, 2012, 12:57 PM
kaptain_zero is offline
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Canada, MB, Winnipeg
Joined Nov 2010
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Originally Posted by RJKIRK View Post
But, while we are on the subject of Canada, if I lived in Canada and was buying a product sold by a Canadian based company over the web to be shipped by the Canadian Post Office to my house...are there any federal or provincial taxes??? If so, how high are these taxes? I would assume these taxes(if any) are collected by the company selling the product and not the Post Office?
This is a bit of a sticky wicket sort of thing.... It all depends. I shall attempt to explain as best I know it.

The Goods and Services Tax. aka the GST, is a *Federal* tax and applies equally in all provinces/territories in Canada. There is also a provincial tax that varies from province to province. Alberta is unique in that it does not charge a Provincial tax. To make it more interesting, some provinces have gone into an agreement with the Federal Gov. to allow the Feds to collect all the taxes for both Fed and Provincial in one go... This becomes the Harmonized Sales Tax aka HST. The reason not all provinces have switched to the HST system is because their local tax is not applied to all classes of goods that the GST applies to and which would be a requirement for the province to switch to the HST system.

Ok, so now we have the inter-provincial trade issue. In Manitoba, where I live, if I order a product from say Ontario (but it does not matter which province), the company I order from is required to collect the GST only, UNLESS they have a branch office/store/warehouse/sales rep or some such IN Manitoba, in which case they would be required to collect both the GST and Provincial Sales Tax (PST). If they only have to charge the GST, it is incumbent on the purchaser to report and pay the PST to the local government which only really happens when it's a business to business transaction... Individuals would rarely do this except in the matter of purchasing cars/trucks/motorhomes and the like where we have to register in the province we are in and the local government then steps in and says "hand over the PST sonny, or you don't get to register your new toy".

If I lived in a province that uses the HST system, a company in a different province with no direct ties to my province would still have to charge me the HST as it is all collected by the Federal government.

As you can see, it's all quite complex and there are some shady loop holes depending on where you order from and where you happen to live. Customs Canada charges either GST+PST or HST depending on what province a package is going to when it comes from outside Canada, but they do not have anything to do with inter-provincial stuff.

And that is how it *works* in real life, as far as I can tell....


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