Should a non-resident choose simplified or normal GST/HST registration?
Model it rather than default to the lighter one. The simplified route is easier to operate and gives up input tax recovery entirely. The normal route allows input tax credits and brings the full compliance obligation with it. So the decision is a model of your Canadian cost base against the administrative burden you are prepared to carry. If you buy almost nothing in Canada, the trade is a reasonable one. If you incur Canadian hosting, warehousing, advertising, subcontractors or professional advice, the tax on all of it becomes a dead cost under the simplified route, and that trade is usually the wrong one.
Can I claim input tax credits under the simplified registration?
No, and that is the whole of what you give up. It is also the reason the route exists. The simplified registration asks less of you: fewer obligations to operate, a lighter filing profile, no need to maintain a full recovery position. In exchange, tax charged to you on Canadian purchases stays where it falls. For a supplier with no Canadian inputs that costs nothing, because there is nothing to recover. For a supplier with a Canadian cost base it is a permanent margin cost that grows as the business does. Work out what you actually buy in Canada before concluding that simpler is cheaper.
Is the simplified GST/HST registration cheaper to run?
Cheaper to administer, not necessarily cheaper overall, and those are two different budgets. The administrative saving is real and easy to see: less to operate, less to reconcile, fewer internal questions to answer. The cost of it stays invisible until somebody totals the tax paid on Canadian purchases that cannot be recovered. The comparison worth making sets one against the other on your own figures for a full year, including the Canadian costs you expect to add as the business grows. A route that suits a supplier with no Canadian spending can become the most expensive line in its Canadian operation.
How do I know whether I have enough Canadian costs to register normally?
List what you buy in Canada, not what you sell there. Hosting and infrastructure, contractors and agencies, warehousing and fulfilment, professional fees, travel, advertising bought from Canadian suppliers, and anything imported in your own name. Total the tax charged on that population for a representative year. Then set it against what operating the normal registration properly will take: the filings, the records behind each credit claimed, the rate mapping and the internal time. The comparison usually answers itself, and it answers differently in the first year than in the third, which is why it is worth redoing rather than deciding once.
Which registration suits a business selling only digital subscriptions to consumers?
That is the profile the simplified route was designed around: supplies to consumers, no Canadian purchases of substance, and a preference for the lightest compliance that satisfies the obligation. Two things move the answer. If a meaningful part of the customer base turns out to be registered businesses rather than consumers, the treatment of those supplies and what those customers need from you changes the picture. And if you start buying in Canada — a local development team, Canadian hosting, a marketing agency — the recovery you gave up begins to cost money. Revisit the choice when either of those changes, not annually out of habit.
What extra compliance comes with the normal GST/HST registration?
More than the filings, which is the part most often underestimated. Normal registration brings the full obligation with it: charging the right rate province by province, holding evidence for the customer location you relied on, keeping records that support every input tax credit claimed, and answering questions on them. The recovery side is not automatic either, since a claim you cannot document is a claim you may not keep. That work is exactly why this is a model rather than a preference. The recovery has to be worth the machinery you build to support it, and for a business with real Canadian costs it usually is.
What happens if the two countries disagree about which of them can tax me?
The treaty has a procedure for exactly that. You apply to the competent authority in your residence country, which takes the case up with its counterpart, and the two negotiate a position that removes the double taxation. Some treaties add binding arbitration if they cannot agree. It is slow and it runs on documents, so the practical work is preserving the record and filing protective claims while the clock runs. See our treaty work.
Branch or subsidiary — which should we use to expand?
A branch keeps one taxpayer: results consolidate at home, losses are usable sooner, and the exposure is that the branch is a permanent establishment whose profit the host country taxes, sometimes with a branch tax on repatriation. A subsidiary is a separate taxpayer with limited liability and local rates, at the cost of withholding on dividends home and transfer pricing on everything between them. The deciding facts are usually expected losses, liability and exit plans. See branch against subsidiary.
