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I am a resident of British Columbia Canada and have been asked by a business in Sweden to do contract work as a web developer. What taxes would I have to pay/charge?

Sinetheta
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  • Starring, since I'm also in BC... But I haven't had any foreign customers yet – Canadian Luke Oct 11 '13 at 18:23
  • @CanadianLuke Reddit is saying no tax – Sinetheta Oct 11 '13 at 19:49
  • @Sinetheta, is it no tax at all? Or just no special tax? – MichaelS Oct 12 '13 at 23:16
  • I'm still waiting to visit an accountant, but it sounds like no tax. Anything on their end is not your problem. – Sinetheta Oct 13 '13 at 01:11
  • Ask and accountant or tax attorney. – Scott Oct 17 '13 at 09:21
  • Please don't bicker in the comments. If you disagree with a view, provide constructive feedback; otherwise, use the [chat] – Canadian Luke Oct 17 '13 at 19:47
  • one thing to watch if you do a lot of overseas contracting is the break-even point of the "quick method" of gst accounting. The more work YOU do for non-gst clients, the less advantageous the quick method, and at a certain point it will cost you money. Conversely, the more you subcontract to overseas contractors the more you make from the quick method. – Michael Johnston Nov 25 '13 at 21:48
  • @MichaelJohnston what "quick method" is that? For me it seems very quick, everything I do is for a client oversees, 0 sales tax, /winning. – Sinetheta Nov 27 '13 at 00:21
  • @Sinetheta, good luck with not remitting any GST. The quick method is described here. Long story short, if your cost of doing business on which you pay GST is less than 28% -- very likely if you are a freelance developer -- you come out ahead using the quick method. If you do a lot of overseas subcontracting that you bill to clients who pay gst, the quick method can represent 1.4% extra profit on your subcontracted work. – Michael Johnston Nov 27 '13 at 00:26
  • and in case "1.4% extra profit" seems trivial, keep in mind that on large subcontracts you'll probably only get away with 20-25% markup with savvy clients. So 1.4% extra profit means 6-7% extra income on those subcontracts. – Michael Johnston Nov 27 '13 at 00:34

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There is no tax. GST does not apply to sales of Intangible Personal Property to customers outside of Canada.

Section 10.1 of Part V of Schedule VI of the Excise Tax Act received Royal Assent on June 22, 2007, and zero-rates all supplies of intangible personal property (IPP) made to non-residents that are not registered for GST. There are, however, certain exceptions, which generally concern supplies of IPP that are closely connected to Canada. The exceptions are akin to other such exceptions found in similar zero-rating provisions for services.

Sinetheta
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  • Hey Sinetheta, this question is part of our self-evaluation review queue. To improve this post and make sure it helps future visitors, can you or someone else please edit in the relevant parts from the link you reference? If the link were to break, this wouldn't be very helpful to future visitors who may be searching the same question. – jmort253 Dec 02 '13 at 09:12