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American company shipping to Canada

By John R Mott |

Francesca asked:

I will be starting an online direct sales business with a company based in the U.S. I will be selling a product, but the product will be stocked and shipped from the States. I will be selling the product worldwide. In this case, do I need to charge GST?

John R Mott answered:

Your sales to Canadian customers are considered taxable sales for GST purposes and your sales to non-Canadian customers are considered zero-rated sales.

You can avoid registering for the GST as long as your taxable sales remain below $30,000 in a 12 month period. Once you exceed that level, you must register and charge GST to your Canadian customers.

When you are registered for the GST, you may claim input tax credits (ITCs) on all of your expenses.

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