Who charges the tax, me or the app store?
One of you, and the rules assign it rather than leaving it to your contract. Where a supply is made through a platform, responsibility can sit with the platform operator rather than with the vendor whose product it is, and the two positions are not interchangeable. If the operator is responsible and collecting, you must not charge it again. If it is not, the obligation is yours, and the platform's silence is no defence. Read what the operator has published about the supplies it accounts for, set that against the supplies you actually make through it, and record the conclusion. Assuming is how one supply gets taxed twice, or not at all.
How do I know if my customer is a registered business?
You ask, and then you keep what they told you. The rules treat a supply to a registered business differently from a supply to a consumer, so the customer's status is a fact the billing system has to capture at the point of sale rather than a question answered at year end. That means collecting a registration number where business status is claimed, checking it in the form the authority expects, and storing the result with the transaction. A self-serve checkout that offers a business option with no verification hands the customer their own tax outcome and leaves the vendor holding the exposure.
How do I establish where a digital customer is located?
From indicators you collect and keep, since there is nothing physical to point at. Billing address, the address held by the payment provider, the country of the payment instrument, the network address at purchase, a telephone country code and the customer's own declaration are the usual candidates. None is reliable enough alone. The workable approach is a defined hierarchy, applied consistently, with the indicator relied on stored against each transaction. Decide that hierarchy in advance and write it down. A documented rule applied consistently is defensible even where a particular case turns out to be wrong; a judgement made transaction by transaction is not.
Do I owe Canadian tax on a subscription sold from another country?
You can, and that is the change these rules made: the obligation moved to the seller or the platform rather than resting on the buyer. No Canadian entity, office or staff is needed for it to apply. What matters is the nature of the supply, whether the customer is a consumer or a registered business, and where that customer is located. So a subscription billed from another continent to a Canadian consumer can carry Canadian tax that the vendor is responsible for collecting and remitting. Establish your customer mix and their locations before concluding that the rules do not reach you.
Are business customers treated differently from consumer customers?
Yes, and that distinction does most of the work in these rules. Supplies to registered businesses and supplies to consumers are not handled the same way, so the compliance task is largely the task of knowing which of the two you are dealing with, transaction by transaction. That is a systems question more than a tax question. The status has to be captured at sign-up, verified in the manner the authority expects, stored with the sale, and re-checked when a customer's details change. Get the status right and the treatment follows. Get it wrong at scale and the correction becomes a data exercise across every affected sale.
What if the platform and I both assumed the other was collecting?
Then nothing was collected, and both of you have a position to establish. Start by fixing responsibility for the supplies in question under the rules as they apply to those supplies, rather than by reference to what either party assumed. Then work out the period affected, the customers concerned and their status, and what should have been charged. Tax never charged is difficult to obtain from a consumer long afterwards, so the practical question becomes who bears it, which returns you to the platform agreement. Settle the allocation for the future in that agreement, and the past in a documented position.
How do you avoid double taxation?
You claim relief once, in the right country, in the right order. Usually the source country taxes first, the residence country then gives a credit for that tax against its own charge on the same income, and a treaty caps the source-country rate. Getting the order wrong is what produces a double charge you then have to unwind. The mechanism differs by income type, which is why we map the whole position before filing either return. See how to avoid double taxation.
What happens if I have not filed for several years?
Missed years are handled as one package, not one at a time, because the route chosen for the first year determines the relief available for the rest. Each country has a disclosure or relief programme with its own conditions, and entering the right one — before the authority contacts you — is usually what keeps penalties down. Filing quietly outside a programme forfeits that protection. See catching up on missed returns.
