Non-Residents Can Get Their Border GST/HST Back If They Plan Ahead
I am asked regularly whether a non-resident person who does not wish to register for GST/HST purposes can get an input tax credit for the goods and services tax ("GST") and harmonized sales tax ("HST") (if charged and) paid at the border. The answer is "no", the non-resident cannot claim an input tax credit if they do not get into the GST/HST system, post security and file GST/HST returns.
However, other options may be available depending on the facts (which can be arranged to permit recovery). These options are available in a business transaction and are not available to a non-resident bringing goods to Canada for their own use (e.g. at a cottage in Muskoka). The two main options are:
1) use of a drop shipment certificate; and
2) structuring the importation in a way to permit another person to recover the money.
These options are not available in every situation. They are complicated to describe and implement. Often the assistance of a sales tax lawyer or accountant or consultant is requirement to make sure the transactions are structured perfectly. Since the purpose of the structuring is to get money back from the Canadian government or accomplish tax relief, the Canada Revenue Agency may inquire about the facts to see if all "t"s are crossed and "i"s dotted.
For more information, please contact Cyndee at 416-760-8999.
Cyndee Todgham Cherniak is the founding lawyer of LexSage, a boutique international trade law and sales tax firm in Toronto,
