I have an unusual case I was hoping someone could shed some light on.
I have an Ontario based Corporation which sells a piece of software and some computer based services. The buyers are from various places. Quebec, Ontario, Alberta, California, Arizona, New York State, etc... (about 70%, 10% Ontario, 20% other provinces in sales)
From a direct billing and tax scenario it's fairly straight forward in the sense you don't collect HST/GST/PST from US customers for these services (being provided virtually and remotely) and you collect the provincially based taxes on a case by case scenario based on the customers location.
I have a "partner" that provides engineering services for all of these sales. He receives roughly 50% of the Income after expenses. He does this as his own Ontario based Corporation.
So far he has been invoicing me for his amounts for each job. Since the job is almost always OUTSIDE Ontario we collect little GST (70% US income). But as an Ontario Corporation providing my company a service, he is supposed to charge me HST 13%. Normally this would balance out if I am also charging HST to the End customer. But because the end customers are out of country in most cases this causes a large HST build up that I may have to absorb.
Is there any way to split the income between the partnering corporations, legitimately, so that the HST charged matches what is charged to the end customer? Possibly a special way to write up the invoice to show the charge is for services provided to a customer in a different geographic location.