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Canada has what you would 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 payments.

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In Canada, exports are “zero-rated” sales for G.S.T. purposes. This radically, and when you ship a program to someone outside Canada, you don’t charge K.S.T. Yet, you begin to claim (or deduct over the G.S.T. collected by you) all the “input tax credits” (G.S.T. that you paid for business purposes) to make that move. The idea, I suppose, is to encourage exporting.

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