How does hst help businesses

Three types of supplies by foreign businesses will be affected: Supplies of digital services; Supplies of accommodation made through an accommodation platform AP ; and Online supplies of goods through a fulfilment warehouse.

The tax rate will be the rate applicable in the province where the consumer is resident. Accommodation platforms An AP is a digital platform that facilitates the supply of short-term rental accommodations i.

From July, updated VAT rules will apply to online sales including online marketplaces to EU private consumers and to the import of low value goods. The European Commission published explanatory notes on the rules on September 20, , which include clarifications, FAQs and examples.

Any business making or facilitating online sales or deliveries of goods to consumers in the EU will likely be impacted in some way by the changes. This is an important change and potentially could create considerable EU VAT registration and reporting obligations for U.

To reduce the administrative burden and simplify VAT reporting, a new reporting system, called the One-Stop Shop OSS will be expanded to include the distance sale of goods. As a result, businesses that sell via online marketplaces e. As of December , there are new tax law updates pertaining to businesses who host an online marketplace or sell accommodations online. The practice also applies to other Canadian businesses, as long as the shipping address for products or destination for services is not within Canada.

To optimally set up your business for ITCs, you should keep stringent accounting records and document everything, especially your receipts. Many accounting software programs allow you to upload scanned photos of your receipts and save them — no more keeping track of paper receipts.

If any documents need physical copies, keep those copies safely in your business or home. A yearly inventory count is also important. There are many ins and outs to running your own business. HST is just one of the systems that seem complicated at first but quickly become second nature. The guidelines above should help you get a quick grasp of HST to follow the regulations for your particular business area.

Wayfair, Inc. There are several considerations for nonresident e-commerce businesses that supply to Canadian consumers. The simplified registration and remittances are expected to be accessible through an online portal starting in late June of This means that nonresident businesses that choose the simplified method over the normal registration and have digital sales to consumers and businesses in Canada must find a way to differentiate between the two types of supplies.

As a result, businesses may need to update their systems so they can correctly identify when to charge the tax. Therefore, nonresident businesses that make cross-border digital supplies of products and services should review the impact of each type of registration with respect to their operations and choose the right type for their situation before applying to register.

In light of the updates, nonresident vendors and distribution platforms will be impacted by the following changes.