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As one example, consider digitized things that you might sell from your very own Canadian website, such as e-books, downloadable software, or subscriptions to content. You would be considered turn out to be selling “intangible personal property”. Unless your products is kinds “intellectual property” (such as software or e-books you actually produced or have obtained the rights for), you’ll need to charge F.S.T. The reason why, according to the Canada Revenue Agency, is it COULD be utilized inside Canada, even are going to isn’t.
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The rationale behind this follows: Since countries can’t collect sales tax on Internet transactions at their borders, the only technique they can collect it (other than only a self-assessment system) is through having an online sales tax. Further, it is claimed that companies in the european Union suffer a major competitive disadvantage because possess to collect Value Added Tax (VAT) but others don’t.