Is the SAGE the accountant software recognised in Canada?

Taxes involved in selling and exporting software internationally, from Canada

• I am with a software company based in Canada. We plan to sell software primarily to other companies in roughly sixty countries, although predominantly to the U.S. and Europe. The average selling price for one seat (one seat = one user) of our software is $400, and the average order consists of 5 seats. When we receive an order (either via the web of via fax) for our software, we deliver it in one of two ways: 1) We have the customer download the software from our web site. 2) We ship a CD. Even if the customer orders several seats, we only ship one CD. I want to know: A) For both cases 1 and 2 above, what sales taxes do I need to charge my customers when they order software? Canadian PST and GST? What about local sales taxes in their own countries and/or states? B) For case 2 above, are the CDs that I ship subject to customs duties and taxes? What documentation do I need to ship with each CD? Do I need to use a customs broker? A great answer would include a schedule of applicable taxes and duties, specific to software sales, for all (or most) countries in the world.

• Answer:

  Hi ronklopfe, Here you go - 1) GST / PST: There are only two scenarios when you'll charge PST and/or GST: 1) GST only: any sale within Canada 2) GST & PST: any sale within BC Never charge GST or PST when an order originates from and is sent to another country. Never charge PST when an order originates from and is sent to any province other than BC. Canada Business Service Centres: E-Business Info-Guide: "In general, all existing tax rules apply equally in an electronic environment, and no new taxes have been created specifically for electronic commerce." http://www.cbsc.org/english/search/display.cfm?code=2842&Coll=FE_FEDSBIS_E Goods and Services Tax and Harmonized Sales Tax - GST/HST: http://www.cbsc.org/english/search/display.cfm?docid=/Regional/federal/fedbis.nsf/894580d8458979828525641b006acb81/b662e0066d89172785256508004daf4b?OpenDocument 2) LOCAL TAXES There are no hard and fast rules as to whether local taxes in other countries will be charged or not, however, your customers are responsible for paying any VAT (Value Added Tax) charge when they receive the package, unless you make other arrangements. You will notice that when you type an international shipment in, for example Canada Post's Shipping Software, no VAT or customs duties are added because that will be done in the destination country and separately charged to the customer from there. 3) CUSTOMS DUTIES "Are the CDs that I ship subject to customs duties and taxes?" It will all depend on the destination and whether the parcel gets stopped at customs or not. Any custom duties (as are the VATs) are the responsibility of the buyer and you don't need to worry about them. "What documentation do I need to ship with each CD?" A normal "Customs Declaration" - the shipper will supply the documents. "Do I need to use a customs broker?" No, a broker is not necessary. >>>>>>>>>>> 4) SHIPPING I have experience shipping internationally and have given thought as to what would be the best way for you to ship your CDs. Although I'm sure you'll want to check out all of your shipping options, I'd like to put a plug in for Canada Post. They have been working hard to get small businesses to use their services and have added some interesting options. Getting a business account with them does take a couple of months, but a VentureOne Card would help to tide you over until your account is activated. One big advantage to using Canada Post is you don't have to worry that your buyer is going to be stuck with brokerage fees. Shipping couriers, such as UPS, are happy to clear your package through customs, however they charge a significant brokerage fee for this service in addition to the custom's fees. There are no brokerage fees using Canada Post. Canada Post VentureOne Card: "As a VentureOne cardholder, you can choose the shipping speed you need, plus enjoy the special Small Business Rate of 5%* on the Canada Post shipping services indicated below, whenever you present your VentureOne card at your local Post Office." Phone 1-877-262-5762 or ask at your post office for an application. http://www.canadapost.ca/business/intsol/sb/ventureone/benefits-e.asp >>>>>>>>>>>>> WITHIN CANADA: XPRESSPOST: "Xpresspost is the Shipping and Delivery Service that provides speedy and guaranteed delivery." http://www.canadapost.ca/textonly/tools/pg/manual/c03-e.asp VENTUREONE SMALL BUSINESS VALUE PACK: "You can now get 4 Xpresspost Prepaid shipping envelopes in one convenient value pack - and for 5% less than if you bought them individually!" Regional Letter Size (241 mm x 318 mm) $24.80/4 Prepaids (1 to 2 days guaranteed) National Letter Size (241 mm x 318 mm) $36.00/4 Prepaids (2 days guaranteed) http://www.canadapost.ca/textonly/business/intsol/sb/ventureone/xpresspost-e.asp >>>>>>>>>>>>> CANADA POST BUSINESS ACCOUNT: Canada Post Business Account: Business customers who electronically transmit their order and apply to their mail items the bar-coded label generated by the shipping system can benefit from a 2% discount. Phone 1 866-511-0546 http://www.canadapost.ca/business/obc/default-e.asp "To establish an Account with Canada Post, Customers need to complete the applicable documentation as required by Canada Post." http://www.canadapost.ca/textonly/business/obc/how_to_pay-e.asp "To get your ID and password call 1-866-511-0546. http://www.canadapost.ca/business/obc/tools-e.asp ELECTRONIC SHIPPING TOOLS: online vs desktop: http://www.canadapost.ca/textonly/offerings/eship_tools/us/desktop-e.asp 2% Automation Discount: http://www.canadapost.ca/textonly/business/discount/default-e.asp >>>>>>>>>>>> UNITED STATES (unfortunately, the prepaid Xpresspost USA is only available for documents) EXPEDITED PARCEL (5 to 9 business days) (buy 241 mm x 152 mm bubble packs at local office supply store) $100 insurance included, $1.20 per $100 additional available. Up to 500g: about $10.00 depending on zone. Available to Canada Post contracted customers using the Sell On-Line Shipping Module or Electronic Shipping Tools. (Surcharge applies) http://www.canadapost.ca/textonly/business/offerings/expedited_parcel/us/default-e.asp XPRESSPOST USA (3 to 5 business days guaranteed) (buy 241 mm x 152 mm bubble packs at local office supply store) $100 insurance included, $1.20 per $100 additional available. Up to 500g: about $15.00 - $16.50 depending on zone. http://www.canadapost.ca/textonly/business/offerings/xpresspost/us/about_specifications-e.asp >>>>>>>>>>>>> INTERNATIONAL (Unfortunately, the prepaid Xpresspost International is only available for documents.) XPRESSPOST INTERNATIONAL (4 to 7 business days guaranteed): Available to Australia, Austria, Belgium, China, Denmark, Fiji, France, Germany, Great Britain, Greece, Hong Kong, Ireland, Italy, Japan, S. Korea, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and Taiwan. (buy 241 mm x 152 mm bubble packs at local office supply store) Xpresspost Int'l: $39.61 including $400 insurance http://www.canadapost.ca/tools/pg/manual/d04-e.asp Other countries: Airmail $23.05 - $48.00 + insurance For example, a 500g Airmail parcel to South Africa would cost: $43.30 + $5.88 = $49.18 including $400 insurance Unfortunately, insurance isn't available for "Small Packets". Airmail would cost $12.20 for a 500g parcel but if it got lost in the mail, you would have no recourse. >>>>>>>>>>>>> Additional Link: Download a PDF copy of your Rate Code Look-up Table: http://www.canadapost.ca/business/rates/rate_code/get_copy-e.asp I hope this helps. If you have any questions, or if this hasn't satisfied your request, please post a clarification request before closing/rating my answer and I'll be happy to respond as I want you to be completely satisfied. Even though you won't be charging taxes on International orders, I did try to find a country list for you - I was unsuccessful. If you would like me to have another look, please let me know. Thank you, hummer Google Search Terms Used: vat zones international shipping vat international shipping european union international shipping vat countries ups canada vat international shipping vat canada shipping international gst custom duties countries "compact disks" canada international shipping etc. I also used my own reference material in regards to Canada Post and also searched the Canada Post website.