In Canada, exports are “zero-rated” sales for G.S.T. purposes. This means that when you ship a system to someone outside Canada, you don’t charge Gram.S.T. Yet, you get to claim (or deduct from the G.S.T. collected by you) all the “input tax credits” (G.S.T. that you paid for business purposes) to make that export. The idea, I suppose, is to encourage exporting.
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Canada has what you call a national sales tax or something added tax (VAT). This Goods and Services Tax (G.S.T.) of five percent (as at January 1, 2008) is applicable to many Canadian financial transactions.
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