Ability to charge sales tax on AppPlanInput?

Partner Discussions
1

I have a company located in Canada and we have an app on the app store.

I was recently audited by the CRA and they are claiming that I owe GST/HST on all the Canadian app sales that I received.

Because I don’t actually get Provincial information from the store who purchased (only the Country). I have to pay 15% of the money received.

So my question is, how do I charge a store GST/HST when they purchase my app? I need this to show as a separate line item so the customer can claim it appropriately.
Can this be done as another line in the AppSubscriptionLineItemInput?

Is there any way I can find out the province of the store when they subscribe, so I can charge them the appropriate amount of tax?

Is there a way that Shopify can do this calculation for us? I.e. they know my business address and they would know the shop’s address too, so it would be nice if they charged the proper tax.

How are other people addressing this for their own apps?

Thanks!

2

After some further investigation and research I’ve learned that Shopify does in fact charge the customer the proper taxes on App Sales.

They don’t however pass this tax onto you (the developer). They must remit the tax directly.

This is great and exactly how I expected the system to work, however the CRA didn’t like this explanation and somehow convinced me that I am the one responsible for collecting and remitting the tax.

Hopefully, I can convince them this is not the case. It would be nice if there were some partner resources (for both us and tax collectors) that explained this process in more detail.

3

So after chatting with CRA about this matter again, they are still charging me GST HST on all my app sales for the year. Even though I did a test app-install and verified that Shopify does in fact charge the store GST/HST. The CRA says that I am responsible for the sale.

They said they need to see a special agreement that I have in place with Shopify if what I am saying above is true…

Anyone else dealt with this when it comes to remitting taxes? Can anyone from Shopify shed some light on what should be happening here?

4

It seems like I need to fill out a form located here:
https://help.shopify.com/en/partners/getting-started/sales-taxes

Just leaving this here in case anyone comes across this post.

Thanks!

1 Like
5

Thanks for sharing this Ozzy! Really appreciate you digging into this!