Legislative Alert: GST Problem for Canadian websites
April 05, 2007



GST problem for Canadian websites addressed in Federal Budget

Read: First Legislative Alert

(April 5, 2007) The federal budget contains important GST relief for Canadian-based websites, responding positively to CAIP/CATA advocacy. However, some questions remain around Internet access.

Canadian websites faced significant uncertainty because of a court decision which required websites to collect GST on charges to non-residents to access content. The Canada Revenue Agency (CRA) had also taken the view that the rule designed to remove GST from intellectual property provided to non-residents should be read narrowly. Many websites have not collected GST on sales or charges to non-residents leaving them exposed to assessment for GST plus significant penalties and interest for the past four years.

In response to concerns raised by the industry, the budget included a proposal which removes GST from a broader class of intellectual property. The rule is retroactive to the beginning of GST which means that Canadian websites which have not collected GST to date can breathe easier.

However, there are some important restrictions… as described in our GST Canadian website briefing note, available upon request to members.

++ Action Item:
Members, please request your "GST Canadian websites" briefing note from the Canadian Association of Internet Providers (CAIP), by contacting John Reid at johnreid@attglobal.net


CAIP, a Division of CATAAlliance:CAIP (Canadian Association of Internet Providers) represents internet service providers across Canada with a mandate of fostering the growth of a healthy and competitive Internet service industry in Canada through collective and cooperative action on Canadian and international issues of mutual interest.