When most US-based sellers consider expanding their ecommerce business – they look to our neighbours in the north to figure out how to sell in Canada. Have you thought about taking your product to the Canadian ecommerce marketplace? What is holding you back?

Great news! Kevin has a stellar guest who was kind enough to bring his knowledge and insights to bear on this critical topic!

Michael Felming spent the better part of the last decade with a prominent firm that focuses exclusively on state taxes. While there, he became one of the country's leading authorities for state tax issues like nexus, drop shipping, eCommerce, and service providers. He assisted many other clients in many industries. He is a frequent speaker having been requested to speak at events all across the country and is often interviewed and quoted by major publications.

Michael is passionate about understanding state tax and proactively helping companies, CPAs, and other tax professionals understand the nuances involved, to successfully avoid or limit audit assessments.

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Outline of This Episode

  • [0:20] Kevin introduces his guest, Michael Fleming.
  • [3:40] Michael explains how taxes work in Canada.
  • [6:10] What you need to know about the Goods and Services Tax.
  • [11:30] The difference between the US and Canada for tax filing.
  • [15:00] What to expect with registering to sell in Canada.
  • [26:30] How do the Province and local tax systems work?
  • [35:00] What is the right thing to do?
  • [36:30] Where do the tax treaties come into play between Canada and the US?
  • [39:30] Kevin recaps the whole process and what you should expect.
  • [44:00] How to connect with Michael.
  • [46:20] Closing thoughts.

How taxes work in Canada

Have you wondered what the difference is between the United States and Canada when it comes to taxes? There are a few similarities and some important differences – thankfully we’ve got Michael here to help break it down for us.

In Canada, there are two types of taxes – the Federal level tax (aka the Goods and Services Tax) and the local level taxes (these are taxes at the Province level).

They also operate what is known as a Value added tax or a “VAT.” A VAT is a tax on the amount by which the value of an item has been increased at each stage of its production or distribution.

Remember – this is just the tip of the iceberg. Tune into this episode of Maximizing Ecommerce to hear Michael expand on how taxes work in Canada.

Do the right thing

There is a growing segment in the ecommerce industry of folks who are trying to game the system. From shady business practices to straight up dodging tax bills – the ways you can tank your business are numerous!

Here is Kevin’s advice – do the right thing. Yes, even when it is hard, and you have to take the long route rather than the shortcut – do the right thing. What will all of your success be worth if you don’t earn it honestly? The truth is, your ecommerce journey is going to be a challenging one, but it can also be rewarding if you bring the right mindset!

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Lions and Tigers and tax treaties, oh my!

Did you know that one of the most important factors for sellers like you to sell in Canada are the tax treaties between the two countries? The topic of tax treaties generally comes up around the topic of income tax. Do you have to pay income tax in your home country and in a country you are selling in – like Canada?

The good news is – no – you don’t have to pay an income tax in two countries. Tax treaties were created in large part to ensure that sellers don’t have to deal with double taxation. Of course – understanding how tax policies work and how they apply to your situation direction is going to differ slightly from one seller to the next.

If you find yourself looking for a resource that will help you cut through all the complexity – Kevin and Michael have you covered! You can learn more about how to sell in Canada by visiting Kevin’s link to the “Canada Checklist” in the resources section and make sure to reach out to Michael for any questions you have.

Three things you need to consider when registering to sell in Canada

All of this tax talk can get your head spinning – unless you like geeking out on this type of thing! If you find yourself struggling to cut through all the jargon – good news – Michael provided three things you need to consider when registering to sell in Canada.

  1. Know your risk tolerance threshold.
  2. Don’t try to make it happen with a razor-thin profit margin – you’ll be miserable!
  3. Make sure you have cash reserves to handle any issue with the federal government.

If you’d like a more detailed look at what it takes to sell in Canada – this is the episode for you. Have pen and paper ready – Michael has a lot to say!

Resources & People Mentioned

Connect with Michael Fleming

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Have you been curious about dipping your toe into the #ecommerce market in Canada? What are you waiting for? Here to help guide the way is @MikeatSalesTax! Get his helpful insights on this informative episode of #MaximizingEcommerce! Click To Tweet Lions and Tigers and #TaxTreaties, oh my! What do the tax treaty laws have to do with you and your #Ecommerce business? Listen to this helpful episode of #MaximizingEcommerce to learn more! Click To Tweet

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