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Goods shipped to Canada are subjected to G.S.T. on importation. Such tax is frequently assessed at the border. But what if you're a Canadian registered for G.S.T., selling to a Canadian customer the supplier is actually a foreign country?

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In Canada, exports are "zero-rated" sales for Delaware.S.T. purposes. This means that when you ship a physical product to someone outside Canada, you don't charge G.S.T. Yet, you get to claim (or deduct via the G.S.T. collected by you) all the "input tax credits" (G.S.T. that you paid for business purposes) to make that foreign trade. The idea, I suppose, is to encourage dispatching.

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