Ask an Expert
Claiming PST and GST on Car Exports
Expert: Alan Pellettier
Mohamed asked:
I run a sole proprietorship registered business in Ontario doing import/export. I have also registered for GST as well as for import/export licence ie. both RT and RM. I have got an order to export a car from Canada to United Arab Emirates. I will be buying the car in Canada and exporting it. Since I will be paying GST and PST as I am buying the car in Canada but exporting it immediately, can I claim both the GST and the PST back if I show proof that it has been exported within a week?
How soon should I claim for the PST - do I have 30 days or 4 years? GST I believe is once a year when I do my tax returns - right?
Alan Pellettier answered:
Claiming GST
Because the person is a vendor registered for GST purposes and is exporting the car outside Canada, he or she can claim input tax credit to recover the GST paid when preparing and submitting the GST remittance form (GST58).
There is no GST required to be collected on the sale as it represents a zero-rate supply of goods, provided that the vendor can substantiate that the sale was an export sale (such as the shipping documentation).
Ontario Retail Sales Tax
Assuming that the person is not registered as a vendor and the retail sales tax paid on purchase of the car exceeded $50, a request for a refund can be made within four years after purchase, provided that the car has been removed permanently from Ontario within 30 days of purchase.
The request for a refund can be made by completing a "General Application For Refund Of Retail Sales Tax" form and mailing it to the Ministry of Finance, Retail Sales Tax Refund Unit. 2nd Floor, 1600 Champlain Avenue, Whitby, ON L1N 9B2. The form must include a copy of the invoice showing the sales tax paid and the proof of payment of the sales tax (such as a copy of a cancelled cheque). The originals should be available upon request for verification, as well as the sales invoice and export documentation as proof that the car was removed permanently from Ontario within 30 days of purchase.
Editor's Note: You can find the General Application For Refund of Retail Sales Tax at www.rev.gov.on.ca/images/rsie0298.pdf.
About the author
Alan Pellettier, BT, BM, CGA, is a tax professional who writes a column, Tax Resource, for The Bottom Line. He can be reached through his Web site at www.attcanada.ca/~apellett.