Attention sellers, the transition period of Canada’s new Mall Tax Collection (MTC) rules has ended, and sellers must provide a valid /HST (federal) registration number to the Amazon platform to enable the Amazon tax calculation service.
First of all, let’s review which sellers are obliged to register for the Canadian GST tax number:
According to the new decree promulgated by the Canada Revenue Agency (CRA) , starting from July 1 , 2021 , all sellers (regardless of the registered address of the business) and e-commerce platforms that ship goods in Canada and receive goods in Canada, in 2021 In the 12 months before or after July 1 , 2019, any income exceeding the registration threshold of 30,000 Canadian dollars needs to register for a sales tax number /HST .
In Canada, a federal, provincial (or territorial) / local taxation system is implemented, and each province has relatively independent tax legislation .
GST refers to the consumption tax levied by the Canadian government nationwide, and the tax rate is unified at 5% . It is a value-added tax levied on most of the goods and services used for domestic consumption, which is paid by consumers at the time of consumption, and finally the merchants pay the tax payable to the government.
HST , the unified sales tax is the combination of GST and PST , which is uniformly collected by the Federal Taxation Bureau. The tax rate is 13% or 15% , but only certain provinces apply: New Brunswick ( NB ), Newfoundland Province and Labrador ( NL ), Nova Scotia ( NS ), Prince Edward Island ( PE ), Ontario ( ON ).
According to the regulations of the Canada Revenue Agency, Amazon will withhold and withhold /HST+PST sales tax for sellers who do not have a registered /HST+PST sales tax number. At this time, some sellers will wonder whether it is necessary to register for GST tax. No. After all, there are additional fees for registration and maintenance.
As I told you in the previous article, Canadian taxation is relatively complicated. With the new taxation policy of the mall, sellers are very likely to face double taxation, and the platform will not give you a tax refund. Therefore, at this time, it is best for sellers to have their own tax ID number to declare and obtain tax credits or tax refunds.
The editor advises the seller that if the sales in Canada are not large, the seller can directly ask Amazon to pay the withholding /HST+PST ; if the seller has a large sales in Canada, it is convenient to register for the Canadian GST tax number . A lot of.
For example, input tax credit, self-declaration of consumption tax, avoidance of double taxation, self-issuance of sales tax invoices, etc.Let me give you a detailed list
(1) Input tax credit (ITC) : While applying for GST , the seller can apply for a Canadian import and export number, use the Canadian import and export tax number to clear customs, and can deduct the import GST consumption tax when declaring VAT ; in addition, Amazon 's FBA logistics and Warehousing GST invoices can also be used for input tax credits.
(2) Self-declaration /HST : When the seller has his own Canadian /HST tax number, he can collect the consumption tax of the customer on behalf of the customer. During the quarterly report / annual report filing period, he can self-declare through the tax agency and pay the consumption tax offline. At this time, Amazon will not Then withhold and pay. For example, if it belongs to the annual report, then you can declare and pay the tax before April 30 of the following year ; if your estimated net tax amount in the first fiscal year is less than 3,000 Canadian dollars or the estimated annual sales are less than 100,000 In Canadian dollars, there is no need to pay a deposit when registering a sales tax number, and you can also apply for an annual report. For sellers, it is equivalent to increasing the cash flow of the tax part;
(3) Establish seller credit: sellers have their own Canadian /HST tax ID number , and can issue sales tax invoices by themselves. For sellers who trade offline, they are more creditworthy.
It has been 5 months since the transition period of the taxation policy of the new Canadian shopping mall , and the registration of the GST tax number of the seller friends should be put on the agenda as soon as possible. One more word, Canada is a country with high taxes, and severe penalties will be imposed on sellers who do not pay taxes in compliance. It is recommended that cross-border sellers still follow the tax regulations of the country to declare and pay taxes, and operate in compliance.