March 31, 2023

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MPs probe officers on capacity to obtain GST from Netflix, other international companies

OTTAWA — Opposition MPs pressed officials Thursday to say how all set they’re going to be to get started amassing GST on cross-border income by overseas corporations starting up next yr, as proposed by the Liberal government’s fiscal update.

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Foreign providers without the need of a actual physical existence in Canada, these types of as Netflix, Airbnb and Amazon, at the moment usually are not expected to obtain the federal merchandise and support tax that’s routinely utilized by domestic businesses.

Senior officers from the Canada Earnings Agency, Finance Section and the Canada Border Providers Agency explained to a Commons digital committee conference Thursday they will be capable to get started amassing GST and HST on cross-border electronic product sales by July 1.

“We are very assured,” CRA main executive Bob Hamilton said.

“I would say, while, that it’s heading to require some contemplating between now and then and, definitely, consulting mainly because we want to do this in a way that is streamlined and efficient.”

He mentioned the company has the means it desires to meet the deadline but there are normally gaps in the tax process that need to be loaded.

“The 1 excellent detail I would reference is that there are other countries and jurisdictions that have carried out some of this, so we’ll be wanting to all those methods as very well as partaking the stakeholders to search at ideal way to put into practice this,” Hamilton said.

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He said the CRA will get a “good share” of the GST income that should be gathered on cross-border revenue and but it is difficult to estimate what share of the full can be collected.

The assortment of GST or HST on all transactions could be a politically billed situation for a number of explanations, which includes global treaties involving Canada and other countries as well as the affect on what arrives out of purchaser pockets.

Conservative MP Philip Lawrence, who led off the queries a two-hour conference of the Standing Committee on Public Accounts, questioned how the CRA can assure international corporations comply with the government’s strategy — particularly if they are not a reliable large organization.

Ted Gallivan, a different CRA formal, mentioned that the OECD — a multinational group that features Canada and most other superior economies — has made very good direction on how to guarantee there is voluntary compliance.

He additional that “countries are performing collectively to deal with intense non-compliance.”

— by David Paddon in Toronto.

This report by The Canadian Press was to start with posted Dec. 3, 2020.

The Canadian Press