On June 2020, the Saskatchewan Ministry of Finance expanded the application of the provincial sales tax (PST) to digital platforms. Three categories of digital platforms were added: electronic distribution platforms, online accommodation platforms, and marketplace facilitators. The changes will apply as follows.
Registration Requirements Prior to June 2020
Prior to June 2020, non-residents were required to register in Saskatchewan if they carry on business in the province or if they meet all three of the conditions below:
- Make goods available for purchase in Saskatchewan.
- Accept orders from Saskatchewan to purchase goods; and
- Deliver goods in Saskatchewan.
According to these requirements, a non-resident individual selling a few hundred dollars of products online through Amazon would be required to registered and bear the related administrative burdens. The changes 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 Accommodation Platform an electronic marketplace for accommodation services. This does not include online platforms providing classified advertising or listing services. Example: Airbnb
- Marketplace Facilitators: a person that makes or facilitates a marketplace for retail sales by sellers and that collects payments from consumers and remits them to the seller. The definition is met whether consideration is received for services or not. Example: Amazon
Application of Tax
Effective June 20, 2020, digital platforms are required to register to collect PST in Saskatchewan and are responsible for its collection and remittance. Non-residents selling or operating exclusively on a registered digital platform are no longer required to register.
Non-residents currently registered may want to consider modifying their registration status if they sell exclusively through one of these platforms and do not otherwise meet the conditions for registration.
Common Digital Platforms
The following digital platforms have registered for collecting the Saskatchewan PST.
- Amazon COM CA Inc.
- Netflix International B.V.
- Google Canada Corporation, Google LLC
- Airbnb Ireland UC only
- Apple Canada Inc.
- Microsoft Canada Inc., Microsoft Corporation
Our International Tax Team can help you measure the impact of these changes on your business. Do not hesitate to contact us for any questions.