Does My Business Need To Charge GST/HST To Foreign Clients Of Canada?


Being a new business owner in Canada may be hard because you may not know the different tax rules set by the Canada Revenue Agency (CRA). GST or HST is a common tax that is applied to various taxable goods and services within the country.

You may charge this tax to local citizens using the set rates that are determined by the place of supply rule by the CRA. However, you may be confused about the tax system when dealing with foreign customers.

If you want to know more about do I need to charge GST/HST to foreign clients in Canada, you’re in the right place. Here is everything you need to know about it.

Should Foreign Clients Be Charged With GST/HST In Canada?

Foreign clients of Canada may or may not be applicable to GST and HST, depending on their true status. If the foreigner has purchased goods or services from a Canadian company but getting them delivered outside of Canada, they are applicable to zero GST. 

You will not charge them any additional tax, and they are only obligated to pay the product’s amount and shipping charges. However, if your foreign client is getting a service within Canada, they are applicable to pay the set GST rate by the CRA. 

For instance, if you’re an Ontario-based company, you will charge the foreign client 13% on all the taxable goods or services they have purchased from you in Canada. Their delivery location or place of service must be within the country to apply the tax.

Examples Of Charging GST/HST Foreign Clients Of Canada

Now that you know the answer to whether your business is required to charge GST/HST to foreign clients, you may want a few examples to understand the system better. So here are some things that will help you:

  1. The Foreign Client Is Leasing A Property In Canada

You can apply the relevant GST rate to your foreign client if they are purchasing a property in the country or renting it. The percentage of tax will depend on the region where the property is located. This is regardless of whether the client is a true non-resident or not.

However, if the foreign client has purchased a property from you that is not located in Canada, you cannot charge them GST or HST. This tax is only for services or goods consumed in Canada.

  1. You Are Doing An Event For The Foreign Customer In Canada

A foreign client may ask you to organize an event for their company’s branch in Canada. This means the venue will be in Canada. You may also be charging an entry fee to the participants for entry.

Remember that GST will be applicable to all foreign clients that are attending this event in Canada. You will charge the tax with tickets as per the CRA rules.

This is your complete guide to whether you need to charge GST/HST to foreign clients in Canada. If the client is getting a service within the country, you must apply GST or HST.

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