GST/HST to Foreign Clients

Tax Topics
1

Hi everyone,

Can we charge GST/HST to foreign clients?

Thanks

AA

2

Can?

Well, as you may know, there are severe penalties under the law for not charging GST/HST…

3

You can. Whether you should or should not do so is a different story.

There are a number of considerations about whether services are “exported”. Determining whether the services you are referring to are “exported” or “provided in Canada” is what you will need to determine.

If exported, no GST is exigible. If not, it applies.

1 Like
4

"S142(1) For the purposes of this Part, subject to sections 143, 144 and 179, a supply shall be deemed to be made in Canada if
…(f) the supply is a supply of a prescribed service; or
(g) in the case of a supply of any other service, the service is, or is to be, performed in whole or in part in Canada."

Page 52 of Guide Rc4022 reads as follows:
"Exported services
Generally, you do not charge the GST/HST on services you
perform wholly outside Canada, or on services that relate
to real property situated outside Canada.
Services you perform on temporarily imported goods
(except transportation services) may be zero-rated.
The goods must be brought into Canada for the sole
purpose of having the service performed on them and
must be exported as soon as possible. Any parts supplied
along with these services may also be zero-rated.
Certain services provided to a non-resident person that are
performed wholly or partly in Canada may be zero-rated,
such as:
â–  certain advisory, professional, or consulting services;
â–  advertising services to an unregistered non-resident
person;
â–  advisory, consulting, or research services to help a
non-resident person establish a residence or business
in Canada;
â–  services and parts for goods or real property under
warranty for an unregistered non-resident person;
â–  custodial or nominee services for the non-resident
person’s securities or precious metals;
â–  training services supplied to an unregistered
non-resident person (but not to individuals) to teach
non-resident individuals in or to give examinations for
courses leading to certificates, diplomas, licences, or
similar documents, or classes or licence ratings that attest
to the individual’s competence to practise or perform a
trade or vocation;
services to an unregistered non-resident person of
destroying or discarding goods, or the services of
dismantling goods for the purpose of exporting them;
â–  services to an unregistered non-resident person of testing
or inspecting goods acquired or brought into Canada for
this service and the goods are to be destroyed or
discarded in the course of providing the service or upon
its completion;
â–  services of an agent acting for a non-resident person
when the service relates to a zero-rated property or
service, or if the supply to or by the person is made
outside Canada; and
â–  services of arranging for, procuring, or soliciting orders
for supplies by or to the person when the service relates
to a zero-rated property or service, or if the supply to or
by the person is made outside Canada."

5

A factual resident, (say, foreign missionary,) though not physically in Canada, would still be charged GST because their status makes them tax residents.

.

6

See the GST/HST place-of-supply rules on this page:
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-collect-which-rate.html

7

Thanks Tim, so this means immigration services for example rendered to non-resident are zero-rated while those who avail the immigration here in Canada will be subjected to HST. Is my interpretation correct?

8

Not necessarily - the place of supply rules for a particular situation would apply depending on the specific facts of that particular transaction.
It is possible for it to be zero rated, or perhaps not, depending on what and where things are happening in a particular situation.

9

Thanks Joe, I have to dig more into that.

10

I would refer to the link that I provided to make any determination. Each is determined by the facts of the situation, so I will not provide a blanket answer here.

If you wish to discuss gst specific enquiries with the CRA, I suggest this link:

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/1-4/excise-gst-hst-rulings-interpretations-service.html