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GST/HST for digital economy businesses

Supply of qualifying goods threshold amounts

As of July 1, 2021, your business may need to register for the GST/HST. One of the criteria is whether your threshold amount of applicable revenues exceeds $30,000 CAD over any 12-month period beginning on or after that date.

This applies to non-resident vendors who sell taxable goods that:

  • are not registered for GST/HST under the normal GST/HST regime and who are not carrying on business in Canada; and
  • sell taxable goods that are delivered or made available to the purchaser in Canada, including goods that are:
  • located in Canada, such as in a fulfillment warehouse, or
  • shipped from a place in Canada to a purchaser in Canada

It also applies to distribution platform operators who are not registered for the GST/HST under the normal GST/HST regime and who facilitate the supply of qualifying goods (also known as “qualifying tangible personal property supply”) through their platform.

You are not required to register for the GST/HST under this measure if you are a non-resident vendor who is not registered and does not carry on business in Canada, and you make the supply of qualifying goods in Canada to consumers through a distribution platform operator. In this case, those supplies are instead considered to be made by the platform operator who is required to charge and collect the GST/HST on those supplies.

Calculating your threshold amount

Your obligation to register generally depends on whether your threshold amount of applicable revenues exceeds $30,000 CAD over any 12-month period beginning on or after July 1, 2021.

Your threshold amount is equal to the total of all your revenues for a period that are, or could reasonably be expected to be, from:

  • the supply of qualifying goods as a non-resident vendor made to specified Canadian recipients, but not including such supplies that are facilitated by a distribution platform operator that is registered for the GST/HST and that are deemed to have been made by that operator
  • the supply of qualifying goods as a distribution platform operator made to specified recipients, including the supply of qualifying goods of non-registered vendors to specified recipients that you facilitate through your platform

If your threshold amount is more than $30,000 CAD on July 1, 2021, you are required to be registered for the GST/HST under this measure on that date, and to apply for registration by that date.

If your threshold amount is $30,000 CAD or less on July 1, 2021, you are not required to be registered for the GST/HST on that date under this measure.

Make sure to regularly recalculate your threshold amount to determine whether it is more than $30,000 CAD in a 12-month period. If it is, you may have to register for the GST/HST.

Examples

Example 1 - Registration threshold amount of non-resident vendor exceeded on July 1, 2021

A non-resident vendor who is not registered for the GST/HST and not carrying on business in Canada makes the supply of qualifying goods directly to consumers around the world, including consumers in Canada. The total revenues of the vendor from these supplies to specified recipients for the 12-month period preceding July 1, 2021, are $6,000,000 CAD.

Based on its past and projected revenues, the expected total revenues of the vendor from the supply of qualifying goods directly to specified recipients for the 12-month period beginning on July 1, 2021, is $6,000,000 CAD on July 1, 2021. The registration threshold amount of the vendor is therefore $6,000,000 CAD on July 1, 2021.

Because the registration threshold amount of the vendor exceeds $30,000 CAD on July 1, 2021, the vendor is required to be registered on that day and is required to apply for registration on that day.

Example 2 - Registration threshold amount of non-resident vendor not exceeded on July 1, 2021

A non-resident vendor who is not registered for the GST/HST and not carrying on business in Canada makes the supply of qualifying goods directly to consumers around the world, including Canadian consumers. The total revenues of the vendor from these supplies to specified recipients for the 12-month period preceding July 1, 2021, are $25,000 CAD.

Based on its past and projected revenues, the expected total revenues of the vendor from the supply of qualifying goods to specified recipients for the 12-month period beginning on July 1, 2021, is $25,000 CAD on July 1, 2021. The registration threshold amount of the vendor is therefore $25,000 CAD on July 1, 2021.

Because the registration threshold amount of the vendor does not exceed $30,000 CAD on July 1, 2021, the vendor is not required to be registered on that day and is not required to apply for registration on that day.

Example 3 - Registration threshold amount of distribution platform operator exceeded on July 1, 2021

A non-resident distribution platform operator who is not registered for the GST/HST and not carrying on business in Canada operates a distribution platform through which non-registered vendors make the supply of qualifying goods to consumers around the world, including Canadian consumers. The total revenues of the non-resident vendors from these supplies to specified recipients are $50,000,000 CAD for the 12-month period preceding July 1, 2021.

The total revenues of the platform operator for its own supplies of qualifying goods that it makes directly to specified recipients are $30,000,000 CAD for the 12-month period preceding July 1, 2021. The total revenues of the platform operator for its supplies made to the non-registered vendors who use its platform are $5,000,000 CAD for the 12-month period preceding July 1, 2021.

Based on its past and projected revenues, the expected total revenues of the platform operator from its own supplies of qualifying goods to specified recipients, including the revenues of the vendors making such supplies that are facilitated through the platform, for the 12-month period beginning on July 1, 2021, is $80,000,000 CAD. The threshold amount of the platform operator is therefore $80,000,000 CAD on July 1, 2021. Since the threshold amount of the platform operator exceeds $30,000 CAD on July 1, 2021, the platform operator is required to be registered on that day, and is required to apply for registration on that day.

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