The Collection of GST from Foreign-Based Sellers on Goods Sold to Canadian Residents from Canadian Fulfillment Warehouses

Published: May 13, 2021
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.

For items over the de minimis threshold (DMT) , while GST is paid on the wholesale value of a 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.

For items under the DMT, no GST is paid upon entry of the good into Canada. The policy would impose GST on the final price of these items if they are stored in a fulfillment warehouse before being sold to the final customer.

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.