In June 2020, the Saskatchewan Ministry of Finance extended the application of the Provincial Sales Tax (PST) to digital platforms. Three categories of digital platforms have been added: electronic distribution platforms, online hosting platforms and market facilitators. The changes will apply as follows.
Registration requirements before June 2020
Prior to June 2020, non-residents were required to register in Saskatchewan if they carried on a business activity there or if they met all three conditions below:
- make the goods available for purchase in Saskatchewan;
- accept orders from Saskatchewan to purchase goods; and
- deliver goods to Saskatchewan.
Under these requirements, a non-resident who sells a few hundred dollars worth of products online at Amazon would be required to register and bear the associated administrative burden. The changes made address this issue.
The Saskatchewan Ministry of Finance defines three categories of digital platforms:
- Electronic distribution platform : an online portal that allows consumers to purchase goods and services. Examples : Netflix, Apple Store
- Online hosting platform : an electronic marketplace for hosting services. This does not include online platforms providing classifieds or listing services. Example : Airbnb
- Market Facilitator : A person who creates or facilitates a market for retail sale by sellers and who collects payments from consumers and remits them to the seller. The definition is met whether or not consideration is received for services. Example : Amazon
Application of the tax
As of June 20, 2020, digital platforms must register to collect PST in Saskatchewan and are responsible for collecting and remitting it. Non-residents who sell or operate exclusively on a registered digital platform are no longer required to register.
Currently registered non-residents may consider changing their registration status if they sell exclusively through one of these platforms and do not otherwise qualify for registration.
Popular digital platforms
The following digital platforms have registered to collect Saskatchewan PST.
- Amazon COM CA Inc.
- Netflix International BV
- Google Canada Corporation, Google LLC
- Airbnb Ireland UC only
- Apple Canada Inc.
- Microsoft Canada Inc. and Microsoft Corporation
Our international tax team can help you measure the impact these changes will have on your business. Please do not hesitate to contact us for any questions.