Income Taxation of E-Commerce In Canada

Taxation of e-commerce income in Canada depends on the characterization of the income – whether the income is from the sale or transfer of certain intangible goods and services. When the recipient of the income resides in a country having a tax treaty with Canada, then the source country will only be allowed to tax the business income, provided that the foreign software vendor has a permanent place of business within Canada.

The following questions have been addressed in this article:

How does Canadian law treat the cost of computer software for the purpose of taxation?
How does Canadian law treat the revenue generated from the sale of computer software via Internet to a Canadian purchaser?
What are the requirements for a non-resident selling digitized products into Canada?
What are the issues related to permanent establishment in Canada?

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