With their Fall (2020) Economic Statement, Canada appears ready to take some important steps in joining much of the rest of the world in recognizing the dramatic shift in the fundamentals of indirect tax compliance by enacting rules effective July 1, 2021 which would:
- Abandon their traditional “carrying on business” test for determining whether a non-Canadian seller is obligated to collect tax in Canada for at least some common scenarios
- Require a wide swath of non-resident sellers of goods, digital products and services to collect tax on sales made to Canadian customers
- Compel online marketplaces (distribution platform operators) to collect on behalf of their clients
- Enable simplified registration and remittance for some newly obligated taxpayers and platforms
Source: SOVOS
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