How do I deal with taxes for foreign (outside of the company's base) on an Internet Services company?


4

I'm creating a website that will charge users for a online service that is usable anywhere in the world, as an example think of Google Docs. As I understand it I will pay tax revenues based on the country that the company operates out of (Canada, although the servers are in the US). How do I charge this to customers from all over the world? Do non Canadians not pay tax and only residents of Canada pay the provincial tax for where the company is located? Or do I charge everyone the provincial tax rate? I'll consult a financial expert eventually but just wanted to get a rough idea as I'm starting to code up the payment section.

Cheers

Finance Payments Tax

asked Jul 27 '13 at 14:21
Blank
Dylan
121 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans

1 Answer


1

You still have to collect the tax, just think when you travel on vacation do they exempt you from tax when you buy candy at the candy store? Your customers can then file for a tax refund from the canadian government if you want. If I were you (and I have done this) I would operate my company in a jurisdiction where there is no sales tax. Having sales tax can confuse your customers that are not used to having this type of tax add-on. You could hide it into your price as well but this might cause you to have prices higher then your competitors.

Take a look at incorporating in a state like Nevada, tax friendly and easy to do. Then when that company makes money and you want to pay yourself as a canadian you simply write a payroll cheque or dividend check (talk to your accountant) and report it as personal income.

answered Jul 30 '13 at 01:46
Blank
Ross Mann
546 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Finance Payments Tax