GST/HST for digital economy businesses: Overview
The information contained on this page is pending Royal Assent of Bill C-30.
You will be able to apply to register starting June 25, 2021.
The new rules for non-resident digital economy businesses are proposed to start on July 1, 2021.
As of July 1, 2021, digital economy businesses, including digital platform operators, may have potential goods and services tax/harmonized sales tax (GST/HST) obligations under three proposed measures that were announced in the Fall Economic Statement 2020 by the Government of Canada and revised as announced on April 19 2021 following consultations with stakeholders. This means you may have new obligations, including registering, and charging and collecting the GST/HST.
Administration and compliance approach
The government expects that affected businesses and platform operators will comply with their obligations to register, collect and remit the GST/HST as set out under the new rules and legislative provisions to ensure that the GST/HST applies effectively and fairly to e-commerce transactions.
On April 19, 2021, the Government of Canada announced in the Federal Budget that the CRA will work closely with businesses and platform operators to assist them in meeting their obligations.
Where the affected businesses and platform operators show that they have taken reasonable measures but are unable to meet their new obligations for operational reasons, the CRA will take a practical approach to compliance and exercise discretion in administering these measures during a 12-month transition period, starting July 1, 2021.
Type of businesses affected
Depending on the type of business in which you are involved you may also be affected by more than one of the measures and will need to consider their combined impact on your business. Even if you are not required to register and charge and collect GST/HST, your customers may have to begin paying GST/HST to a digital platform operator on your supplies if they are facilitated through a digital platform.
Types of businesses affected by each measure:
Cross-border digital products or services
These are non-resident vendors who sell taxable digital products or services, such as online music streaming or traditional services, to Canadian consumers and Canadian entities who are not registered under the normal GST/HST regime. This also includes distribution platform operators who make or facilitate such supplies through their platform. A simplified GST/HST registration, reporting and remittance system will be available to non-resident vendors and non-resident distribution platform operators under this proposed measure.
Sale of goods located in Canada
These are non-resident vendors who make taxable sales of 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. This also includes distribution platform operators who sell or facilitate the sale of such goods through their platform.
Platform-based short-term accommodation
These are suppliers of taxable short-term accommodation in Canada that are facilitated through an accommodation platform by an accommodation platform operator. This also includes accommodation platform operators who facilitate such supplies through their platform. A simplified GST/HST registration, reporting and remittance system will be available to non-resident accommodation platform operators under this proposed measure.
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