Imported taxable supply (GST/HST self-assessment)

A buyer meets this when the business pays a foreign supplier for software, licences or services. Section 218 of the Excise Tax Act says that, subject to that Part, every recipient of an imported taxable supply shall pay the tax to the Crown, and section 217 defines the term with exclusions, such as a service acquired for consumption, use or supply exclusively in the course of the person’s commercial activities. Where it applies, the tax falls on the Canadian recipient. See transferring domains and software licences.

How the CRA describes it

The CRA says that if you buy services or intangible personal property from an unregistered non-resident outside Canada, you have to self-assess the GST or the federal part of the HST when you bought them for use less than a stated share in your commercial activities. It points to Form GST59 to remit the tax. Whether a given supplier is registered, and how the share is measured, are facts to confirm.

What to check or ask

• Which foreign suppliers the business pays, and for what
• Whether the business uses each supply exclusively in commercial activities
• Whether the seller has filed Form GST59 for past periods
• Whether the business is registered, see GST/HST registration