How to add GST/PST/HST for Canadian customer transactions.

[former_member95896]

Hello,

We have a franchisee setup as a customer that is located in Canada. We found out from our tax department that we need to setup GST and PST for them for all transactions moving forward as well as have a mechanism to bill them for missed GST and PST from our past debit memos/invoices.

We are a US company, the legal entity that transacts with the Canadian franchise is a US entity in USD at the company code level. CAD is the transactional currency, vertex is our tax system. We do not have a localization for Canada setup at this point because we don't have an operating entity there it is solely franchise and expenses related to those franchisees (customers).

Considering this setup, how does a US company account for Canadian GST/PST/HST in S/4HANA Cloud? I know I could probably setup a custom pricing condition to do it, but I suspect there is a standard way to account for this tax.

Thanks,

Ryan

[Sai_Kasturi · Accepted solution]

Hi Ryan,

Is there a legal requirement in Canada to submit a GST report to the local government?

[former_member95896 · Accepted solution]

Hi Sai,

Yes if you relatively low amount of business with someone in Canada you're required to register with the Canadian govt and submit GST and PST (where applicable).

Thanks,

Ryan

[Sai_Kasturi · Accepted solution]

Hi Ryan,

Setting up localization for Canada is the Best Practice I can recommend, considering the GST / PST tax reports you have to submit to the local government.

Setting up a custom pricing procedure may serve as the temporary fix of including GST/PST in customer invoice, but it will not help in legal documentation. I don't see any other standard approach to address this requirement to my knowledge.

Thanks

Sai

[former_member95896 · Accepted solution]

Hi sai ,

How can we setup localization if we do not have a legal entity/operating entity that is in Canada? I get what you're saying that the Canada localization is required to get the tax reports and expose the GST/PST config and fields, but in looking at the activate documentation on adding a new region/localization it seems to require that we setup new company codes and structures that we don't have or need.

Thanks,

Ryan