In recent years, new sales tax registration programs have been created for GST/HST/QST purposes allowing non resident vendors of the digital economy to collect the GST/HST and the QST under a simplified program. These entities are now tagged since July 1, 2023 with the last 6 digits of their GST program number as “RT9999”. Under the QST regime, the letters “NR” are at the beginning of the 10-digit QST registration number and identifies registrants under the specified system. A company operating in the digital economy that is located in Canada but outside Quebec could qualify and apply to the Quebec designated registration.
Under the rules of those 2 specified programs, non resident suppliers should not collect GST/HST/QST from clients that would acquire those goods and services that would otherwise give rise to an input tax or a rebate. Indeed, registrants are not allowed to claim that kind of tax neither as an input tax nor as a rebate. Therefore, clients have to provide their tax registration number to these non resident vendors of the digital economy under this compliance process so these companies don’t collect the tax.
It is more difficult to qualify to the factors method due to the rules governing the digital economy
For those using the factors method to handle GST/HST/QST recoveries on employee expenses, they should know that they are only entitled to claim taxes on a given expense report when that report is subject to tax at a ratio of at least 90% (see our page for further details). Since there will now be a growing number of suppliers who are providing supplies that can be used in the course of commercial activities and that will no longer qualify for the 90% rule, the use of the factor methods is now more difficult that ever to comply with. As of November 13th 2023, there were 1352 entities registered under that program at the federal level and 1594 at the Québec level. Both of these numbers are up from a week ago.
This is a series of examples of entities that are registered to the specified program at the federal level: Airbnb Ireland UC, Amazon (12 entities), DropBox, Expedia, Google LLC, LinkedIn Corporation, Meta Payment Inc., Monday.com, TeamViewer Germany GmbH, etc…
This is a series of examples of entities that are registered to the specified program for QST purposes: Digital River GmbH, Expedia, GoDaddy.com LLC, Google LLC, Indeed Ireland Operations Ltd., Upwork Global Inc, TikTok, Toronto Star Newspaper Inc., Twitter, VistaPrint Canada Coproration, Zoho Corporation, etc…
(Note: you will find at the end of this posting a larger sampling).
Any of these suppliers in your employee’s expense reports ?
Organizations who are questioning the use of their GST/HST/QST factors method could notably compare if these suppliers are found in expense reports submitted by their employees.
In conclusion, although there is a trend for organizations to revisit their employee expense process using the Excel spreadsheet and paper documents to embrace the digital transformation, they should also revisit the use of the factors method. The exact method may be the one to embrace in light of the detrimental impact that the new simplified GST/HST/QST programs and the expansion of the digital economy are having on the factors method.
Simplified GST/HST Registry
There are 1352 entries as of November 13th 2023 that includes the following:
• Airbnb Ireland UC
• Alibaba.com Private Singapore E-commerce Private Limited
• Amazon (12 different legal entities)
• Bloomberg Index Services Limited
• Booking.com B.V.
• British Broadcasting Corporation
• DropBox
• Ebooks.com
• Expedia
• GitHub
• Godaddy.com LLC
• Google LLC
• Hotels.com L.P.
• Hotwire Inc.
• Indeed Ireland Operation Limited
• LinkedIn Corporation
• McAfee Consumer Affairs North LLC
• Meta Payments Inc.
• Monday.com
• Priceline.com LLC
• Shutterstock Inc
• Slack Technologies Inc
• TeamViewer Germany GmbH
• TikTok Inc
• Trello Inc
• Twillo
• Twitter Inc.
The federal registry is available here:
Suppliers Outside Québec That Are Registered for the QST Under the Specified System
The registry is made of 1594 entries as of November 13, 2023 and includes the following:
• Airbnb Ireland UC
• Amazon.com Services LLC
• Digital River GmbH
• DropBox Inc.
• Expedia Inc.
• GitHub, Inc.
• GoDaddy.com LLC
• Google LLC
• Hotels.com LP
• Indeed Ireland Operations Ltd.
• LinkedIn Corporation
• (Mailchimp) The Rocket Science Group LLC
• Meta Payments, Inc.
• Priceline
• Shutterstock, Inc.
• Sync.com Inc.
• Toronto Star Newspapers Limited
• Trello, Inc
• Twilllo Inc.
• Twitter Inc.
• Upwork Global Inc.
• Vimeo.com Inc.
• Vistaprint Canada Corporation
• Zoho Corporation
The Quebec registry can be accessed here:
