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Does HST and or GST/PST have to be charged by the U.S. company?

By Gord Ahier |

SJDunn asked:

A U.S. company ships goods to its Canadian sister corporation for eventual distribution to Canadian customers. Does HST and or GST/PST have to be charged by the U.S. company? Or only by the Canadian company when its sells to customers?

Gord Ahier answered:

Good Question - but not a simple answer. Accordingly you will need to verify the tax status of the parent and who the importer of record for the importation of the goods. Normally the Canadian Company is importing the goods into Canada. In a typical situation, the US parent is not a GST/HST registrant. In this situation, the assessment of the GST/HST is handled by the custom broker on the importation of goods to Canada. As the Canadian purchaser, you will pay the GST on the importation of the goods to the custom broker. The Canadian company will charge GST/HST as applicable on the sale of product to its customers. Your situation may not follow these facts, so it is important that you discuss your specific fact situation with your accountant.

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