In Canada, exports are “zero-rated” sales for .S.T. purposes. This means that when you ship a product to someone outside Canada, you don’t charge D.S.T. Yet, you get to claim (or deduct by the G.S.T. collected by you) all the “input tax credits” (G.S.T. that you paid for business purposes) to make that ship. The idea, I suppose, is actually encourage forwarding.
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Canada has what you might call a national sales tax or something added tax (VAT). This Goods and Services Tax (G.S.T.) of 5 percent (as at January 1, 2008) is applicable to many Canadian connections.
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