Hey there, fellow Canadian digital nomad! Let's dive into the world of GST/HST and figure out if you need to charge it on services you provide to foreign clients. It's a great question, and I'm here to help you navigate these tax waters.
The Basics of GST/HST for Digital Nomads
First things first, it's important to understand that as a Canadian, you're generally required to register for and collect GST/HST if your worldwide taxable supplies exceed $30,000 in a calendar quarter or over four consecutive calendar quarters. This applies even if you're working remotely or travelling abroad.
Good News for Services to Foreign Clients
Now, here's the exciting part for digital nomads working with foreign clients: You typically don't need to charge GST/HST on services provided to non-resident clients who are outside Canada1. This is considered an export of a service, and it's generally zero-rated for GST/HST purposes.
What Does "Zero-Rated" Mean?
When a service is zero-rated, it means that while it's technically taxable, the rate of GST/HST charged is 0%. So, you don't collect any tax from your foreign clients, but you can still claim input tax credits for the GST/HST you pay on expenses related to providing these services.
A Word of Caution
While this is great news, there are a few things to keep in mind:
What About Your GST/HST Registration?
Even if most or all of your clients are foreign, you might still need to register for GST/HST if your worldwide revenue exceeds the $30,000 threshold. Being registered can be beneficial as it allows you to claim input tax credits.
The Bottom Line
For most Canadian digital nomads providing services to foreign clients, you won't need to charge GST/HST on those services. However, tax situations can be complex and unique to each individual, so when in doubt, it's always a good idea to consult with a tax professional or contact the CRA directly for guidance specific to your situation.
Keep rocking the digital nomad life, and happy global entrepreneurship!