What does place of supply mean?
It is the question of which jurisdiction has the right to tax a supply, and at what rate. It is decided by rules rather than by where your business sits or where your invoice is raised, and the rules differ by what is being supplied: goods usually follow where they are when they move or are delivered, services follow a test that depends on their type, and digital services generally follow the customer. Getting it wrong costs money in both directions, through tax charged where none was due and recoverable by nobody, or tax not charged where it was due and payable out of your own margin.
How do I prove where my customer is located?
With evidence collected at the point of sale rather than reconstructed afterwards. Where a supply follows the customer, the customer's location is a fact you have to be able to demonstrate, and the usual building blocks are the billing address, the country of the payment instrument, the network address the purchase came from and, for a business customer, a registration number you have checked. Pick a hierarchy, apply it in your billing system, and store what it relied on with the transaction. Businesses that treat this as a tax matter rather than a systems matter end up estimating years later from data they did not keep.
Does place of supply follow my customer or my business?
It depends on what you are supplying, which is why one business can face both answers. Rules for digital services generally look to the customer, on the theory that consumption happens where the customer is. Other services are tested differently: some by where the work is physically performed, some by where the recipient is established, some by the location of the property they relate to. Goods are decided by where they are and where they go. Sort your revenue into supply types first, because the place of supply question is only answerable one type at a time.
Do the rules differ for business and consumer customers?
Frequently, and the difference is often who accounts for the tax rather than whether it is due at all. For many cross-border services supplied to a registered business, the customer accounts for the tax in its own jurisdiction and the supplier charges none; the same supply to a private consumer obliges the supplier to charge and remit. That makes your customer's status a load-bearing field in your billing data. Where the status is wrong or unverified, the supplier usually carries the consequence, because treating an unverified customer as a business is the position the rules put the burden of proof on.
Which province's rate applies to a Canadian customer?
The rate follows the place of supply within Canada, which for most services is determined by where the recipient is rather than by where the head office that signed the contract sits. So a national contract can attract different rates for work done for different locations of the same customer, and a single rate applied across the whole account is usually wrong in one direction or the other. Provinces that harmonised their sales tax with the federal one charge a combined rate. Provinces that did not run a separate tax of their own, which is a different registration and a different return.
What if two countries both say the supply is theirs?
Then you have a genuine double charge and no treaty to resolve it, because income tax treaties do not cover sales tax and there is no competent authority to approach. The practical route is to identify which country's rule you actually meet on the facts, take that position, and document why the other country's rule does not apply. Where both charges have already been paid, the route is a claim under each country's own repayment procedure, on its own time limits. This is a problem to design out of a contract at the drafting stage rather than argue about after invoicing.
How does a remittance actually work, and is it taxed?
A remittance is a transfer of money, not a category of income, and moving your own funds between your own accounts is not what creates tax. What can create tax is the income behind the money and the rules of the country it leaves. India, for instance, collects tax at source when a resident individual remits abroad under the Liberalised Remittance Scheme, and requires certification before certain payments leave. The transfer is the trigger for paperwork rather than for tax. See the LRS and tax collected at source.
How many days can I spend in a country before I become tax resident?
It depends on the country, and a day count is only ever the start. Many use a threshold in a tax year, some also look at averages across several years, and some have no day test at all and decide on where your home and life are. Two countries can both conclude you are resident, which is what the treaty tie-breaker exists to settle. Counting days without checking the tie-breaker is how people end up filing as resident nowhere. See the residency tie-breaker.
