Countries across the globe are extending VAT on digital services offered by online providers and platforms to consumers. Another Canadian Province has recently joined the tendency: the British Columbia government is proposing that, from July 1, 2020, non-resident digital service suppliers (e.g. digital downloads, streaming services, etc.) will have to register for, collect, and remit 7% Provincial Sales Tax (referred as PST). This practice differs from the Canadian federal approach that is still considering introducing VAT on digital services for the entire country. Nevertheless, this act is also anticipated to be done by 2021.
But back to British Columbia: non-resident digital service suppliers, including digital platforms, will have to register with a simplified system for the purposes of collecting and remitting PST. Registration is a must to suppliers exceeding an annual sales threshold of CAD $10,000.
In January 2019, another Canadian provinces,Québec and Saskatchewan, extended their sales tax system to the cross-border supply of digital services by non-resident companies.
Global VAT Compliance specializes in helping international business be VAT compliant around the world offering VAT solutions to Digital Companies, so if you can foresee these developments impacting your business, do not hesitate to contact us.