Alert to Non-Residents - It is a Good Time to Take a Closer Look at Canadian Business Activities
I have helped many non-residents of Canada register for goods and services tax (GST) purposes over the years. These GST registered non-residents must apply the HST place of supply rules to their transactions involving Canadian buyers/clients.
In addition, many of these non-resident clients have filed extra-provincial registrations to carry on business in a Canadian province so that they could open a bank account and pay the Receiver General any GST collected.
These non-resident entities have made two representations to the Government of Canada and/or a provincial government that they are 'carrying on business" in Canada. Many have done so without considering income tax and/or withholding tax consequences.
The implementation of HST should trigger a closer look at a non-resident's Canadian business activities. So far, I am close to 100% in finding mistakes that could be or are already very costly.
Cyndee Todgham Cherniak is counsel to and in affiliation with the International Trade Law and the Tax Law (Commodity Tax
