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Manufacturing: how to charge taxes when exporting
Expert: Julia Germain
Sharon asked:
I am a manufacturer in Ontario and I am selling a fabricated machine tool to a company in Quebec and they resell my product to someone else. Can you please tell me what taxes I should be charging to this company? Do I need to give them the PST exemption form to fill out? Also when I charge the GST, do I need to put my GST# on the invoice? Thank you very much.
Julia Germain answered:
In the situation you described you do not have to charge PST for two reasons. First off, the customer is not operating in Ontario and secondly, the customer is reselling the product and is therefore not the end user. The end result is that you do not need to charge your Quebec customer PST.
Make sure you get your client to fill out a blanket exemption PST form (the download link is: http://www.trd.fin.gov.on.ca/userfiles/page_attachments/Library/3/Rsie_204.pdf?N_ID=3?N_ID=3.
Keep this form on file in case of any type of government audit.
You must, however, charge GST and you must also clearly indicate your company's GST number on your invoice.
If however, the client was the end-user in Quebec (not-reselling), you may be required to collect & remit Quebec Provincial Sales Tax if your client does not "self-assess" themselves accordingly. Remember to always check with the province of question.
The Maritime provinces have no provincial sales tax nor does Alberta.
All other provinces do have provincial sales tax and you should check with each of them accordingly.
In some provinces - Equipment sold for Manufacturing purposes is also PST Exempt.
Always check with the proper government agency accordingly. They won't bite.
I hope that answers your question.
Julia Germain
Ask the Accountant Inc.
Tel : 416-573-4229
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About the author
Julia Germain is an accounting and business consultant offering full accounting & bookkeeping services to small businesses in York Region. Julia runs Ask the Accountant Inc., a company operating in York Region. Contact Julia at Ask the Accountant Inc., Tel : 416-573-4229.