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10 Important Facts for Non Residents Doing Business in Saskatchewan

30/09/2011


With the positive upswing in the Saskatchewan economy, Saskatchewan has recently seen an increase in the number of non residents entering the province to provide their services and their products.

The crossing of borders within Canada brings with it increased reporting requirements and responsibilities unique to the province in which the goods and services are being provided.

The Saskatchewan Provincial Sales Tax regime is certainly not without its own reporting requirements and responsibilities. Non-compliance will bring with it related penalties and interest.

10 Important Facts for Non Residents Doing Business in Saskatchewan
  1. All persons carrying on business in Saskatchewan must register with the Saskatchewan Ministry of Finance.
  2. The Saskatchewan Ministry of Finance has two different methods of registration -
    1. Vendor Number
    2. Consumer Number
    Both numbers bring with them reporting requirements and responsibilities.
  3. In Saskatchewan, the nature of the contract that you are providing may be considered to be a:
    1. Supply only contact
    2. Supply and install contract
    3. Service only contract
    Determination of the Provincial Sales Tax and the corresponding reporting requirements in respect of the above differ.
  4. It is important to identify whether your business is providing “tangible personal property”, “real property” and or specific “services” as each is treated differently under the Saskatchewan Provincial Sales Tax.
  5. The nature of your business activities will determine whether the goods or services which you are providing are taxable in Saskatchewan at the current Provincial Sales Tax rate of 5% or exempt from the Provincial Sales Tax.
  6. Taxable goods brought into the province from outside the province for one’s own consumption or use will trigger a self-assessment of the Provincial Sales Tax. Various costs, some of which include freight, customs and excise taxes and duties (excluding GST) must be factored in to the basis for the self-assessment.
  7. As a non-resident working in Saskatchewan, you may be required to post a Guarantee Bond or a cash deposit in respect of the work you are conducting in Saskatchewan.
  8. A non-resident contractor who brings equipment, vehicles and tools into Saskatchewan is required to self-assess the Saskatchewan Provincial Sales Tax on taxable supplies upon entry into Saskatchewan. There are two methods for this self-assessment -
    1. Tax on depreciated value
    2. Tax on temporary use formula
  9. A leased or rented vehicle brought into Saskatchewan is subject to tax on the total lease/rental charge (excluding the GST).
  10. The Saskatchewan Ministry of Finance will issue clearance certificates to non residents upon completion of their contracts in Saskatchewan.

If you are not aware of the above factors, you may find yourself in a position of non-compliance in respect of your business activities in Saskatchewan. The Saskatchewan Provincial Sales Tax regime can be complex and at times confusing if one is not fully apprised of its intricacies.

MNP has an experienced group of Indirect Tax Specialists to assist you with your questions and concerns. Should you require assistance, please contact a member of our Indirect Tax Team for assistance.

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