Review Canadian GST/HST self-assessment on overseas services

For a Canadian business, an overseas service invoice without GST/HST can still require a recipient-side tax review. Start with foreign supplier purchases, including consulting, licenses and rights used in Canada. Record what was acquired, who supplied it, the contracting entity and the supplier's Canadian registration status. A foreign mailing address alone does not establish the tax result.

CRA states that services or intangible personal property bought outside Canada from an unregistered non-resident generally require federal GST/HST self-assessment when commercial use is below 90%. Financial institutions have a different threshold and additional rules. This guide's register supports review for an ordinary business; it should not be used as a financial institution calculation.

Ask the department using the service to describe the work or rights received and the activities they support. A general cost-center label such as administration may cover several activities. Preserve the contract scope, locations served and the basis for any allocation between activities instead of assuming that every corporate expense has identical commercial use.

For a hypothetical software license used by two divisions, record which users and functions belong to each division and what activities those divisions perform. The tax reviewer can then assess the relevant use percentage. User counts might be useful evidence, but they should not become an automatic allocation rule when usage differs materially.

Keep the allocation calculation beside the underlying purchase. If the invoice combines separate services, identify whether the components can be supported individually. Mark estimates and unresolved facts so a reviewer can distinguish evidence from a provisional assumption.

CRA's import guidance separately addresses the provincial HST component where the recipient resides in a participating province and the purchase is used in participating provinces. The federal commercial-use review does not supply every provincial answer. Give the reviewer the provinces of use and supporting allocation rather than applying a single address-based shortcut.

For applicable self-assessment, the CRA guidance uses the Canadian-dollar amount charged and the period in which the service or right was paid for or became payable. Registered businesses report the relevant federal amount on line 405. Retain the invoice date, contractual payment terms, payment date and currency conversion support so the selected period can be reconstructed.

A payable posted late needs a timing review even when the supplier was eventually paid. Record any correction decision against the original period and keep it separate from the current-period purchase population.

Maintain one row per assessed purchase component with the reviewed tax base, applicable components, calculation and return reference. Add an explanation for excluded purchases. This makes a later reviewer able to distinguish a considered exclusion from an invoice that was never examined.

Check whether the supplier later issued a Canadian tax invoice or credit. Such a change needs review before an additional claim or assessment is posted. Preserve both versions and the approved resolution. Reconcile the total accepted assessments to the filed return and retain any separate input-tax-credit decision; do not assume that self-assessed tax is automatically recoverable in full.