What is a Canadian resale exemption?
Canada has 4 different types of taxes, and their applicability varies by region:
- Provincial Sales Tax (PST)
- Quebec Sales Tax (QST)
- Goods and Services Tax (GST)
- Harmonized Sales Tax (HST)
For more information on which taxes apply per province, see the link here: https://www.retailcouncil.org/resources/quick-facts/sales-tax-rates-by-province/
A Canadian PST resale exemption is a purchasing status that proves you are a legitimate retailer or purchaser and are buying products to either resell or use as component parts of products you plan to resell.
QST/GST/HST will not have resale certificates, as there is not a resale exemption available for these tax types.
However, a QST exemption can apply if your business is registered under the general QST system, even if the purchase of supplies is not for resale.
Who needs to register for a GST/HST account?
You must register for a GST/HST account if you make taxable sales or leases in Canada, and if you do not qualify as a small supplier. A small supplier is a person whose total revenue was equal to or less than $30,000 in a single quarter or over the last four consecutive quarters.
Who needs to register for a PST/QST account?
All businesses operating in British Columbia, Saskatchewan, and Manitoba must register for a PST account in addition to a GST account.
Most businesses operating in Quebec must apply for a QST account as well as a GST account, regardless of the taxable nature of their sales and if the business is not qualified as a small supplier.
Register for a Tax Account
Before charging and collecting the GST/HST, register for an account with the Canadian Revenue Agency. You can find more information about registration at this link: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/account-register.html
If you are a digital economy business, find out if you need to register for the GST/HST with this questionnaire: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/digital-economy-gsthst/find-out-need-register.html
If your business operates in Quebec, you must register for the QST. More information regarding registration can be found at this link: https://www.revenuquebec.ca/en/businesses/consumption-taxes/gsthst-and-qst/registering-for-the-gst-and-qst/how-to-register/.
For PST registrations, please visit the website of the applicable province relative to your business location and activity.
Can I provide a resale certificate for GST/HST/QST to Gelato?
Resale exemptions upon the sale of a good do not exist for GST/HST/QST. However, a registrant of the GST/HST/QST can submit a claim to recover the GST/HST/QST tax paid for goods or services acquired or imported into Canada for use, consumption, or supply in the course of their commercial activities with an ITC.
All eligible ITCs can be claimed while filing the GST/HST/QST return for the reporting period in which the purchases were made. Unlike GST/HST/QST, if PST is paid, it cannot be claimed back as an input tax credit (ITC) on a PST return. Consult with your tax advisor for information on how to properly claim an ITC for resale purposes.
How can I be exempt from QST when making purchases from Gelato?
If your business is registered under the General QST system, please provide your valid TQ registration number and Gelato will not charge QST on your purchases of supplies, as Gelato is registered under the Specified System.
How can I be exempt from PST when making purchases for resale from Gelato?
If you are purchasing goods for resale in a PST jurisdiction, you can be exempt from PST by providing Gelato with your valid PST registration number.
If you are not registered for a PST number in British Columbia, but will be making exempt purchases for resale, return the completed form below to claim an exemption: https://www.dandh.ca/pdfs/BC_TaxExemption.pdf
Who should I address the resale certificate to?
All resale certificates should be addressed to the company that is selling the goods. You can find the necessary details listed below for Gelato:
625 Massachusetts Ave
Cambridge, MA 02139
Which provinces does Gelato charge tax in?
Gelato charges and collects QST/PST in Quebec, Saskatchewan, Manitoba, and British Columbia, as well as GST/HST in Ontario, Prince Edward Island, New Brunswick, Novia Scotia, Newfoundland and Labrador, Alberta, Northwest Territories, Nunavut, and Yukon.
The information provided on this website is for informational purposes only and is not intended to be legal advice. Please consult a tax professional for specific tax guidance.