DDP and Canadian Sales Tax

[always_learning]

Hello, I'm just not getting this so please help me out. 

US seller shipping US to Canada. 

I want to collect the relevant sales tax (GST/HST/PST) at checkout and then ship it DDP and pay the carrier who actually pays the tax authorities. 

Do I need to register with the Canadian tax authority to start collecting this, or am I good as long as the carrier takes care of it?

[DaisyVo]

Hi @always_learning 

I totally get why this is confusing—Canadian sales tax rules can be tricky, especially when dealing with DDP (Delivered Duty Paid) shipping. Let’s break it down simply.

Since you’re a US-based seller shipping to Canada and you want to collect GST/HST/PST at checkout, there are two key things to consider:

1. Do you need to register for Canadian sales tax?

Yes, if your sales to Canadian customers exceed $30,000 CAD in a 12-month period, you are required to register for a GST/HST account with the Canada Revenue Agency (CRA) and start collecting the applicable tax. If you’re under that threshold, registration is optional but can be beneficial for input tax credits.

2. How does tax collection work with DDP shipping?

Since you want to ship using DDP (Delivered Duty Paid), you are responsible for paying import duties and taxes on behalf of the buyer. That means:

• If you haven’t registered with the CRA, you shouldn’t collect GST/HST at checkout because your carrier (e.g., UPS, FedEx, DHL) will handle the import tax collection from you, not the customer.
• If you have registered, you can collect GST/HST/PST at checkout, but you’ll need to properly remit it to the CRA yourself rather than relying on the carrier.

3. What’s the best approach?

If you want the carrier to handle the tax payment and avoid CRA registration, do not collect sales tax at checkout. Instead, let the carrier charge you for the taxes when importing, and factor that cost into your pricing. However, if you want full control and to collect/remit taxes properly, then register with the CRA and report those taxes yourself.

If you need extra help, just let me know asap. Thanks
Daisy.