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December 3, 2020

Canada announces specified GST/HST regime for e-commerce supplies

The federal government tabled Supporting Canadians and Fighting COVID-19: Fall Economic Statement 2020 on November 30. The Fall Economic Statement (FES) contains significant Goods and Services Tax (GST)/Harmonized Sales Tax (HST) proposals, including measures designed to ensure that GST/HST applies fairly and effectively in the context of an increasingly digital economy. Specifically, nonresident vendors supplying digital products and services to consumers in Canada would be required to register for, collect and remit GST/HST with respect to their taxable supplies to Canadian consumers. Similar requirements would apply to supplies of short-term accommodation made through digital accommodation platforms, as well as to goods supplied through fulfillment warehouses. In addition, the supply of certain face masks and face shields will be zero-rated for GST/HST purposes. The FES contains draft legislative amendments to the Excise Tax Act (Canada) to implement these proposals.

A Tax Alert prepared by Ernst & Young Canada, and attached below, provides additional details.


Full text of Tax Alert