Let’s Talk about Canadian Sales Tax!
Michael J. Fleming is the founder and president of Sales Tax and More, a full-service consulting and solutions firm with a passion for state tax. He is one of the country's leading authorities on sales tax issues such as consulting and research, registrations, returns, nexus, drop-shipping, eCommerce, and service providers.
Michael is a renowned writer and speaker, and he regularly presents on webinars. He is also the host of the Sales Tax and More Podcast, where he shares his wisdom and learnings with his audience in order to help them navigate the tricky world of taxes.
In this episode…
Mike Fleming and Ellie Moffat sit down with Kyle Armes, one of STM’s sales tax specialists, to discuss Canadian sales tax.
Here’s a glimpse of what you’ll learn:
What is a Canadian business number?
The process of registering in the five different Canadian Provinces.
Registering in Canada with an online account.
Is the language barrier affective when working in Quebec?
Connect with Michael
Episode Transcript - Audio Version
[00:00:00] Welcome to Sales Tax and More, your go to resource for all things state tax related. Now, here is your host, Michael Fleming.
Mike Fleming: Hi, Mike Fleming here, founder of Sales Tax and More and today's co host of the Sales Tax and More Podcast where we talk about everybody's favorite topic, which is of course sales tax. And we've been getting a lot of questions about Canada. We haven't done a podcast about Canada in quite a while.
A lot of those questions centered around registration and how to get set up. So I figured let's go to the expert and today we're going to interview Kyle Armes, who's one of our [00:01:00] registration specialists. And she really, when it comes to Canada, she's absolutely the best. So before we get started and speaking with Kyle let me first introduce you to my co-host, Ellie Moffat.
Ellie Moffat: Hey, everyone. It's great to be here. So excited to have Kyle here today to talk about Canada. I think this is going to be a great episode. And before Mike jumps in here with these questions, I'm going to do a quick introduction. So first of all, please like and subscribe to this podcast. We really appreciate it.
It goes a long way in helping us. And for those who don't know Sales Tax and More, we are a full service consulting and solutions firm. So we have a great team here of experienced tax professionals who are very dedicated to fulfilling your state tax and related needs. So we do a lot of sales tax returns, sales tax registrations, consultations, research, audit defense, exemption certificate management, and like our name states more.
So if you have questions about our services or you'd like to work with us, please reach [00:02:00] out. We'd love to hear from you and we'd love to work with you. And with that, Mike take it away.
Mike Fleming: All righty. So Kyle, thank you for taking the time to join us today. I know that you guys are really swamped with the number of registrations you're doing.
So let's get right into this. And one of the big questions we get is what is a business, a Canadian business number? Can, can you tell us what a Canadian business number is?
Kyle Armes: Hey, guys. It's great to be here. So a Canada business number is a federal business number that the Canada Revenue Agency uses to identify businesses. The business number is equivalent to the federal employer identification number here in the United States.
And the Canada Revenue Agency is similar to the IRS we have here as well. So before we're able to start on any registrations in Canada, we have to request a business number first if our clients don't already have [00:03:00] one. We request the biz, we can request the business number a couple different ways. And processing times can vary depending on where we request it from.
So I've come to find out that the GST registration requesting the business number through the GST registration takes the longest time to process, whereas if the client needs to be registered in British Columbia, it's significant, significantly a much shorter process. So any Canada registration projects we receive can have different processing times depending on what provinces they need to be registered in.
Mike Fleming: Yeah, and you just touched on something that's really important there Kyle, the processing times. And when you're registering for the GST HST, that can take anywhere from four to six months or sometimes even longer. So it's quite the long process. So [00:04:00] sometimes, like you were saying, I know that we go and get some of the provinces registered before we actually get the GST HST registration finished. Now, we've I've mentioned this before in numerous podcasts and webinars. When you're registering in Canada, there are actually five maximum, if you wanted to register everywhere, five maximum registrations you can do.
When you register for the GST HST, you automatically registered in five provinces. But then there's four other registrations. Can you talk about those separate registrations at all?
Kyle Armes: Yeah. So there's the GST HST that registration takes the longest to process, like you mentioned Mike.
So once we request the Canada business number, we can move forward with the remaining registrations. So the GST is the longest of all. And it can the time with the GST can also [00:05:00] processing time can depend on how many people are there to work staff wise. And then the time of year I've actually had an agent tell me that most of the staff is out during the summer vacationing.
So any registration submitted beforehand or during the summer usually won't be processed until the fall or even later. And they recently updated the registration process for the GST HST as well. So we are able to submit the registration online now, but we still have to fax in formation documents.
Unfortunately, they didn't add that to the registration yet. And then, so it's a longer drawn out process and once the registration gets assigned to an agent, they'll also reach out for more questions to be answered. Just to confirm a few things, make sure there's no double taxation and just that you need to be registered for the tax.
Quebec is a little bit different. So it's partially done online. And [00:06:00] then as on paper as well. Thankfully, Revenue Quebec allows us to upload the paper documents that's required that we fill out during the online registration. Though the funny thing is that they don't normally accept English documents.
The paper application we upload during the online process can be submitted in English. And they accept that form in English, but any other documents that Quebec requires needs to be submitted in French. Quebec is the second longest registration to get processed and sometimes can even take a little bit longer than the GST registration if there is any complications.
Then the other provinces in Manitoba, Saskatchewan, and British Columbia are easier, quicker registrations. Manitoba is pretty much instant. Saskatchewan takes 24 hours to process, but you still have to wait on a PIN to be [00:07:00] received in the mail to set up the online account. And then British Columbia takes 21 days to process. And then you can set up the online account once they accept your application through email.
Mike Fleming: Okay. Thanks very much for that information. You said 2 things and I'm going to save 1. I got 2 questions out of what you just said there. The 1st is about online accounts. Forever, I can remember that we had to do everything by fax.
There were no online accounts because we didn't have social insurance numbers, which is the Canadian equivalent of a social security number. So since none of our clients had those social insurance numbers, everything was done by fax. So tell me more about, I didn't even know that we could do online accounts in Canada right now.
Kyle Armes: Yeah, so actually our individual clients that aren't residents in Canada can't have an online account. They [00:08:00] still are supposed to file using an access code, but we were able to set up a non resident representative account for you, Mike. So through that account, we are able to see all of our clients accounts that have authorized us access. So even though our clients may not be able to see into the accounts, we can get a better idea of what's in the accounts for the GST.
Mike Fleming: That's fabulous. That makes things a lot easier. So I don't personally file the return. So even though it's set up in my name or do the registrations, I still didn't know that we had changed that process.
I learned something new today. Thank you very much, Kyle. Glad we had you on. Alright, so, the second question I had when you were talking, you're talking about French. I think that most people believe that English is the language that's spoken in Canada, and in most of Canada it is. But as you mentioned, Quebec [00:09:00] they speak French, and they make believe they don't speak English a lot of times.
As you said they want a lot of the documents in French. Can you talk about the language barrier in Canada? Is it affective when you're working with Quebec?
Kyle Armes: Yeah, it definitely takes longer to process the registrations in Quebec. There's a lot more time trying to translate the documents we receive or any emails we get as well.
So, Quebec actually passed a law in 1974 that made French the official language of Quebec. So anything to do with Quebec, with business signs and customer service all has to be in French, but thankfully there are bilingual agents that work at the Revenue Quebec. So if we do need to call, we can get some information and give us some guidance on some issues.
But sometimes it's a little bit of a struggle to [00:10:00] explain our issues in a way that they understand since English isn't their primary language. You have to fill out a whole other registration for the online account, and then you need to print and sign some documentation. But those documents have to be in French. They give you two choices for the English version and French version. And you got to make sure you mail in the French version or else they will kick it back and they won't process it.
So they're very firm in their processes but other than that one form for the original registration for the QST account. Everything else has to be in French and all the notices and letters they send out are in French.
Mike Fleming: So if anyone listening to this podcast is actually French, I excuse this, but hey, they're just a little bit different up there in Quebec. You know they, I think it's that French influence and they march to their own drum and make things a little [00:11:00] bit tougher on the rest of us. Me myself, I have a tough time just understanding the Canadians who speak English. Heck, I have a tough time, listening to my neighbors here in Texas. I grew up in New York and my English is a little bit different than a lot of other people's English.
And as I get older, I have a harder time understanding anybody. So kudos to you for being able to deal with the Quebec and their French requirements. Thank you very much for doing that. Anything else that you want to talk about?
Kyle Armes: Not that I can think of off the top of my head.
Mike Fleming: All right. I definitely appreciate you joining us today. As I said, I learned something new today. And we'll do a follow up here. We'll talk more about Canada in a little bit more detail, but I definitely we had so many questions about the registration process in Canada.
I wanted to get our expert on. Kyle, you are the expert, and I definitely appreciate you taking the time to join us to explain some of these types of [00:12:00] questions that we are getting from our clients and prospective clients.
Ellie Moffat: Yeah, I agree. You know what, Mike? Oh, sorry about that.
Kyle. Kyle said, thanks for having me. And I was just going to say, everyone on our team is a really good sport. We ask them to be on this podcast to share their expertise because it is expertise. And we really appreciate having you here, Kyle. And taking the time out of your day to do so and you know, for everyone else, if you have sales tax needs, please reach out.
We'd love to hear from you again. We'd love to work with you. We have a lot of solutions, a lot of services. You can reach out directly to me at E Moffat. That's E M O F F A T at salestaxandmore. com. You can also visit our website, salestaxandmore. com. And we have a lot of resources unpaid and paid on our website that are very helpful in your sales tax efforts.
So, please come please keep listening to our podcast and don't forget to check us out. Thank you so much
Mike Fleming: Thank you everyone and [00:13:00] hope to see you on the next episode of the Sales Tax and More Podcast. Bye. Bye