In trying to comply with tax laws for your e-business, many times yourself falling down the rabbit-hole, going through the looking glass, and attending a Mad Tea-Party.
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Not only is it critical uncover whether a taxable sale was stated in Canada or not, but where in Canada. Whether it was made (or deemed to be made) in any of the Harmonized Sales tax (H.S.T.) provinces (Nova Scotia, New Brunswick, and Newfoundland and Labrador), a higher, thirteen percent H.S.T. rate applies (as at January 1, 2008). This is really because those provinces have allowed Canada to recover their provincial sales taxes for them.
The rationale behind this follows: Since countries can’t collect sales tax on Internet transactions at their borders, the finest they can collect it (other than a self-assessment system) is the online sales tax. Further, it is claimed that businesses in nations suffer a vital competitive disadvantage because they have to collect Vat (VAT) but others don’t.