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Canada is Bringing Back Exemption Certificates!

author photo of Silvia Aguirre

Canada is bringing back exemption certificates. If you sell to Canada that is an important statement and it brings up a lot of questions. I wanted details but I was having trouble finding any information. I sent an email to British Columbia to inquire about the new certificates and how they are to be handled. Here is part of the email I received in response:

"British Columbia’s provincial sales tax (PST) will be re-implemented effective April 1, 2013, at a general tax rate of seven percent. The legislation and regulations to re-implement the PST on April 1, 2013 are now complete, giving businesses all the information they need to successfully transition to the PST. The final legislative amendments to the Provincial Sales Tax Act (PSTA) have received Royal Assent and the Provincial Sales Tax Regulation (PSTR) and the Provincial Sales Tax Exemption and Refund Regulation (the PSTERR) have been approved and will come into effect on April 1, 2013. To help businesses prepare, government is making unofficial consolidated versions of the PSTA, PSTR and PSTERR available on our website.

A person may purchase tangible personal property (goods) for resale by

i) providing their supplier with their PST registration number, or

ii) by providing a completed exemption certificate

New exemption certificates are currently under development and will be available prior to April 1, 2013."

As you can see, tax exempt entities are expected to complete an exemption certificate but no one has decided on what it should look like. You CANNOT use previous exemption certificate forms and the new ones have yet to be made available. Keep checking this site for updates, as the changes are only two weeks away.

I have made inquiries about procedure for other provinces, such as Manitoba, and I will post updates as details emerge.

Note: Silvia Aguirre is no longer accepting new comments nor questions. More recent "Exemption Certificate Mgmt" posts by Michael Fleming (of Peisner Johnson) are still active. Also use the Site's SEARCH bar to locate other helpful information.

Other recent “Exemption Certificate Mgmt.” posts by Silvia Aguirre:

NOTE: All blog content, comments, and participation subject to disclaimer at bottom of page.

Comments

Note: Silvia Aguirre is no longer accepting new comments or questions.  More recent "Exemption Certificate Mgmt" posts by Michael Fleming (of Peisner Johnson) are still active.  Also use the Site's SEARCH bar to locate other helpful information.

5 Responses to Canada is Bringing Back Exemption Certificates!

  • Posted by Author photo of Susan JaegerSusan Jaeger on December 5, 2014 7:43am:

    While Silvia Aguirre’s very helpful Exemption Certificate blog information is still available – she is no longer posting new items or responding to new comments or questions.
    However – some good news… Andy Johnson and Michael Fleming of Peisner Johnson & Company have taken over the Exemption Certificate blogging activity. If you would like to post an Exemptions Certificate Mgmt related question – feel free to submit through the comment section in the newest/latest post(s) listed on this linked page.
    http://www.salestaxsupport.com/blogs/sales-use-tax/author/mikefleming/
    Alternately, use the SEARCH feature in top right to locate many other helpful site resources.
    Thanks!
    SalesTaxSupport.com

  • Posted by Gabriel on November 12, 2013 4:12am:

    Hi. Is the U.S. exempt to pay canadian sales taxes under U.S. Federal Government contracts since the U.S. is usually inmune to pay local and state taxes in accordance with federal regulations?

    • Posted by Author photo of Silvia AguirreSilvia Aguirre on November 15, 2013 2:06am:

      Interesting question, yes the US federal government is exempt in the US states, and proper documentation (certificates) should be obtained. Regarding Canada, if the items are being imported into the US, then the certificate should be from that ship to state. The exported goods in Canada could be considered zero-rated (tax exempt), hence no tax should apply. If you did get charged on exported items, you can apply for a refund. However, if the item are purchased in Canada and used in Canada (not exported) will be subject to GST/HST. Silvia

  • Posted by Christine on September 27, 2013 3:02am:

    Any update on Manitoba exemption certificates.

    • Posted by Author photo of Silvia AguirreSilvia Aguirre on October 31, 2013 2:20am:

      I am sorry Christine, I looked and could not find a Manitoba certificate. Do you have a copy of such certificate?

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