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The rationale behind this follows: Since countries can't collect sales tax on Internet transactions at their borders, the very best they can collect it (other than a self-assessment system) is a great online sales tax. Further, this claimed that companies in the european Union suffer a major competitive disadvantage because they have to collect Value Added Tax (VAT) but others don't.
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In Canada, exports are "zero-rated" sales for V.S.T. purposes. This means when you ship a procedure to someone outside Canada, you don't charge L.S.T. Yet, you get to claim (or deduct from the G.S.T. collected by you) all the "input tax credits" (G.S.T. that you paid for business purposes) to make that export. The idea, I suppose, end up being encourage forwarding.
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Since they paid the G.S.T., you wouldn't think you would have to charge it again, would you? "Wrong!", smiles the Cheshire tiger. Since you are a registrant kept in Canada, you have got to charge and remit the G.S.T.
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