hst

[fwdtech]

Does the HST bother any members, esp. non-BC, non-Ont. members?
It seems ALL of the registrars with attractive features for domainers are in BC or Ont.
Why not set up a virtual sister corp. in Alberta ($250 set-up, $40. annual thereafter)?

[Maxwell]

It's my understanding that before you can even start as a registrar you have to pay something to the effect of $3,000 in approval fees.

Or would this sister corp just be owned by the corp which has already been approved as a registrar?

[RatherGood]

Does the HST bother any members, esp. non-BC, non-Ont. members?
It seems ALL of the registrars with attractive features for domainers are in BC or Ont.
Why not set up a virtual sister corp. in Alberta ($250 set-up, $40. annual thereafter)?

You mean operate, live and own assets in a province subject to HST but hide in a province that doesn't? Maybe its because the ensuing legal headaches and the likelyhood of the CRA deciding one day that you owe them millions in "avoided" taxes, penalties and interest for your jurisdictional malfeasance simply isn't worth it.

[6sons]

Does the HST bother any members, esp. non-BC, non-Ont. members?
It seems ALL of the registrars with attractive features for domainers are in BC or Ont.
Why not set up a virtual sister corp. in Alberta ($250 set-up, $40. annual thereafter)?

Not sure why you are asking this? Is it because you are in a GST (not an HST) province? And are being charged HST (12-13%) by the Ontario/BC based registrars?

[fwdtech]

Not sure why you are asking this? Is it because you are in a GST (not an HST) province? And are being charged HST (12-13%) by the Ontario/BC based registrars?

W.
That is correct.
We're in Alberta.
I emailed one registrar, who said they had to charge us the HST - CRA rules.
So, wasted an hour, or so, with CRA to verify, as it doesn't make sense that Albertans are paying an overnight increase of 7 or 8 %.
But, CRA confirmed the decision.

There are 7 registrars on CIRA's sort-by-province list, that are in Alberta. They only add on 5 % GST to their fees (which are too high - and why no one here uses them), regardless of the registrant's province.

You mean operate, live and own assets in a province subject to HST but hide in a province that doesn't? Maybe its because the ensuing legal headaches and the likelyhood of the CRA deciding one day that you owe them millions in "avoided" taxes, penalties and interest for your jurisdictional malfeasance simply isn't worth it.

There's nothing illegal about having a corp. with it's head office in one province over another for tax benefits.

[RatherGood]

There's nothing illegal about having a corp. with it's head office in one province over another for tax benefits.

INCOME tax benefits, not to avoid HST obligations.

[6sons]

[QUOTE=fwdtech;1910246]W.
That is correct.
We're in Alberta.
I emailed one registrar, who said they had to charge us the HST - CRA rules.
So, wasted an hour, or so, with CRA to verify, as it doesn't make sense that Albertans are paying an overnight increase of 7 or 8 %.
But, CRA confirmed the decision.

QUOTE]

Thanks for the update. I hear an opposite opinion that domain reg is "place of supply" so in that case the HST should be based on where the customer is located. This is the case for example with website design. (see example 70 http://www.cra-arc.gc.ca/E/pub/gm/b-103/b-103-e.pdf ) On the other hand you called CRA to verify. Did they give you any terminology to hang on to like "suscription or intangible". Did he/she "sell" you on this? If so, how? Otherwise it is possible that the person doesnt know enough about the subject since domain names are not referred to specifically anywhere in the rules. Thanks. W

[6sons]

W.
There are 7 registrars on CIRA's sort-by-province list, that are in Alberta. They only add on 5 % GST to their fees (which are too high - and why no one here uses them), regardless of the registrant's province.

We recently received our ***quarterly forms which prompted me to call CRA directly to double check our previous research.

After carefully explaining to a CRA "ruling agent" all of the aspects of domain registration and sales and the nature of domains the agent I spoke to said that domain registration is a service and the HST/GST should be based on "address of recipient". Among other points she made, if "place of supply" were applicable then some Rars would be able to charge only 5% which is unfair to HST provincial/participanting Rars and the legislation would be flawed for this reason as not all domain registrants are HST/GST registrants. At the very least, in a audit situation, this is a point of support for using the "address of recipient" approach.

As for domain sales "address of recipient" also applies as the goods are intangible and the use cannot be restriced to a province or to Canada. "Use" in this case means "when someone searches it (uses it) in the address bar" that use could not be restricted to internet users in Canada.

Though she was confident in her analysis and conclusions she did suggest (when asked) that a ruling can be obtained in writing which takes a few weeks.

*** What prompted my call CRA at this time was that I noticed no change in the forms. There was no allowance for reporting the breakdown from which province you have collected HST/GST. The first agent I spoke to acknowledged that this seems strange but that is the way it is and to keep records of this breakdown in the event of an audit....

[CanSpace]

I'm not a tax expert myself but as far as I know we're supposed to pass on the HST costs now regardless of where the registrants are in Canada. Bear in mind that CIRA is charging us HST as well... so all we're doing is passing on the cost. I don't see how we could charge certain registrants only GST, as GST no longer exists in Ontario for tax-reporting purposes.

We're actually quite upset about the whole thing... we pride ourselves on our low prices, and all HST did for us was make us pass on an 8% price increase to our customers.

[6sons]

I'm not a tax expert myself but as far as I know we're supposed to pass on the HST costs now regardless of where the registrants are in Canada. Bear in mind that CIRA is charging us HST as well... so all we're doing is passing on the cost. I don't see how we could charge certain registrants only GST, as GST no longer exists in Ontario for tax-reporting purposes.

We're actually quite upset about the whole thing... we pride ourselves on our low prices, and all HST did for us was make us pass on an 8% price increase to our customers.

the HST you are paying Cira you can report as an input tax credit. This should not be passed on to a registrant in a non-participating province. So if you have a customer in Alberta (non HST province) you charge only GST of 5%. Against this you claim the tax you paid to Cira and in this micro example you would get a refund.

According to CRA the "address of recipient" approach is what is to be used. Here is a breakdown of what you should be charging ... based on the location of your customers:

Alberta, Manitoba, Nunavit, NWT, Prince Edward Island, Quebec, Saskatchewan, Yukon 5% GST
British Columbia 13 % HST
New Brunswick, Newfoundland, Labrador, Ontario 12% HST
Nova Scotia 15% HST

---------- Post added at 12:51 PM ---------- Previous post was at 12:43 PM ----------

Just noticed that two of the rates above were mis-placed.. correct breakdown is:

Alberta, Manitoba, Nunavit, NWT, Prince Edward Island, Quebec, Saskatchewan, Yukon 5% GST
British Columbia 12 % HST
New Brunswick, Newfoundland, Labrador, Ontario 13% HST
Nova Scotia 15% HST

[whitebark]

all HST did for us was make us pass on an 8% price increase to our customers.

Thankfully the people of BC will get the chance to remove this new tax via a binding referendum next year. Living in Ontario - sorry you are still screwed!

[katherine]

Why does government make our life so complicated :(

[TheLegendaryJP]

Looks like bc will now take a vote and ottawa agreed to buckle under pressure and end hst in that province should the people speak. Lets hope it happens and ont is next.

[msn]

More than just a vote - several governments will be watching this very carefully.

[Spex]

great move by the residents of BC...too bad the vote won't happen for another year though. And early estimates peg the cost of the referendum at $30 million

[RatherGood]

Thankfully the people of BC will get the chance to remove this new tax via a binding referendum next year. Living in Ontario - sorry you are still screwed!

I wouldn't count my chickens just yet. Taxes only go one way in this country.

[TheLegendaryJP]

I am slightly hopeful but agree, one way is right. When they started the TFSA they mentioned how much theyd lose and one anylist said it straight on the news, they find a way to make up for it dont worry lol Sad how overly taxed we are, it is becoming ridiculous. No wonder they dont want Canadians armed.

[msn]

From an economics perspective, it would be better if there was a straight national 10% VAT across the board, exempting food and medicine, and cutting income taxes by 5%.

[DomainsInc]

the hst sucks, when you sell a domain to a canadian, being canadian you are paying the government an extra 7% now!

[msn]

What part of the VAT do people not get?

It is an end-user tax: if you buy registrations you pay it; if you sell registrations you collect it, and at the end, they either collect from you or pay to you the difference.