# Taxation: international customers in internet



## smb (Sep 27, 2016)

Hi all,

I'm planning to start a self-employed online business in the Travel industry. I'm registered in Quebec, Canada. 

Based on the following points:
- I'll be the only employee. I don't want to hire employees.
- All services (hotel bookings, tours..etc) are offered outside Canada (Ex. tours in India, Europe...)
- The services will be sold online exclusively.
- The services are exclusively for customers outside Canada. 
- I'll not have a "hard" nexus in Canada, no stores, no warehouses, no offices. I'm only registered in Canada and operate the business from my home office.

Must I register to GST/HST, QST???
Must I charge taxes to international customers??


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## Nerd Investor (Nov 3, 2015)

smb said:


> Hi all,
> 
> I'm planning to start a self-employed online business in the Travel industry. I'm registered in Quebec, Canada.
> 
> ...


Sounds like from an income tax perspective you should be fine (ie: just filing in Canada) as you are working exclusively through a permanent establishment in Canada, not using an office, agent, etc anywhere else. 
For the HST part, I'm not as well versed, but you'll want to look at the place of supply rules for services: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/hst-tvh/srvcs/menu-eng.html

My understanding is, you charge GST/HST/QST based on where the supply is deemed to take place, which is generally where your customer is located (ie: Ontario customer gets charged HST). For non-residents, this would generally mean they are zero-rated (don't charge GST/HST). 

One final caveat: I really know nothing about Quebec taxes, but I know they can be a different animal compared to the rest of the country as far as tax rules, so please take all of this with a grain of salt. 

I would recommend you go see an accountant before you get up and running to figure all of this out in detail and make sure you get registered for the correct accounts in the proper time frames.


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## Market Lost (Jul 27, 2016)

smb said:


> Hi all,
> 
> I'm planning to start a self-employed online business in the Travel industry. I'm registered in Quebec, Canada.
> 
> ...


Nerd Investor has it correct - the answer according to this is no. This is based on what you are saying, which is that all transactions are outside of Canada to foreign customers.

Just for the record, the number of employees isn't relative to HST, it's just the sales that matter.


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## Robillard (Apr 11, 2009)

Certain countries are treating digital businesses as if they have a permanent establishment in their country if they sell to their nationals. This is grossly out of step with international standards, but it is something of which to be wary. Saudi Arabia is a bit notorious for this.


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