Say you sold a subscription for accessing digitized content (from numerous sources) on your Canadian website to a client in the United States. Given that there are no restrictions regarding where the intangible individual property might be used, and the residential or commercial property is not thought about intellectual residential or commercial property (nor the provision of a service), the American consumer undergoes G.S.T., even if he never concerns Canada.
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In Canada, exports are “zero-rated” sales for G.S.T. purposes. This implies that when you deliver an item to someone outside Canada, you don’t charge G.S.T. Yet, you get to claim (or subtract from the G.S.T. collected by you) all the “input tax credits” (G.S.T. that you spent for business functions) to make that export. The idea, I suppose, is to encourage exporting.
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Oddly, the very same logic does not use when an American buys a regular book (or a cars and truck) which he COULD bring into Canada with him and use here. It is real that it is easier for Canada to assess such items at the border than in the online world, but I understand of no cases of Americans being taxed on the automobiles or books they bring with them when they pertain to reside in Canada for about half the year.![]()
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