The collection of GST from foreign-based sellers on the final price of goods sold to Canadian residents from Canadian fulfillment warehouses

Published: February 18, 2021; Updated: February 18, 2020
PDF

Abstract

Certain foreign-based sellers store goods in warehouses within Canada in anticipation of the goods being sold to buyers located in Canada. Once an item is purchased, it is shipped from the warehouse to the buyer. While GST is paid on the wholesale value of the good when it is imported into Canada, GST is not necessarily collected on the gap between the wholesale value and the final price of the good. The proposed measure would ensure that GST is collected on this price gap.

If a seller is registered to collect GST, the seller themselves would be responsible for collecting GST on the final price. If a seller is not registered but they sell through a distribution platform, the platform would be responsible for collecting GST on the final price on behalf of the seller.

This policy would come into effect on July 1, 2021.