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Canada new GST rules for marketplaces

By Anna / In Marketplaces / 3 Min read

That seems that 2021 is to be remembered by online marketplaces. More and more countries introduce new tax rules for OMPs. And Canada is also not far behind.

From 1 st of July 2021 all OMPs selling goods to private individuals in Canada must check do they have obligation to register, report and pay GST to Canada.

Here main conditions when a marketplace needs to withhold and pay GST:

  1. Goods sold to Canadian private individual
  2. Goods at the moment of sale is in Canada
  3. Vendor has no Canadian GST registration number
  4. OMP sell above the threshold of 30,000 CAD

At the Lovat platform, we have a threshold calculation feature for Marketplace to control their registration and reporting obligations for Canada and across the globe.

The Canadian government introduced 12 month transition period when new reform will come into full force.
We expect in the near future dataset for tax audit purposes in order to collect data. But what we already see from the current stage that Marketplaces need to collect:

  • Departure address
  • Arrival address for each shipment
  • Place of establishment of Vendor
  • Vendor GST registration

All main platforms (Shopify, Magento, WooCommerce) already adjusted the departure address dataset in the shipment section, but for Place of establishment of Merchants – it is still under consideration at main platforms.
Marketplaces that sell above the threshold must register for the general GST scheme, simplified scheme is not available for OMPs. In the beginning, OMP needs to obtain the CRA’s written approval that discretion in terms of data handling will be exercised.

You can get information also at the Canadian tax authority website