Sales tax now charged for Canadian customers

September 16, 2015 6.4k views
Billing

Does Digital Ocean have registered corporate office in Canada? If not, then why have they decided to start charging Canadian customers sales tax as of 2015-10-01?

13 comments
  • So can we pay in Canadian pesos I mean dollars?

  • How will the tax charge be calculated? If it is charged in USD @ stated GST/HST %, Canadian customers will be overpaying on the tax.

  • Why is a US Corp collecting tax for the Canadian Government? Are you expanding to include Canadian Data Centres? Could you please let us know what law says that you must do this? Never heard of this before.

  • Even if they do get canadian data centres, why should I pay tax if my services are in the United States? This doesn't make any sense to me...

  • This doesn't make sense. Digital Ocean is incorporated in the US, why would a US corporation be collecting Canadian sales tax?

  • Nowhere in my profile does it say where I live... Must be a Paypal thing.

  • As a Canadian 🇨🇦 I noticed this and it concerns me as well.

  • Sure hope DigitalOcean has a registered GST number they will be including with every invoice, or I wont be paying it.

  • From the support area's search:

    VAT stands for “Value Added Tax.” We must bill EU customers this additional tax due to changes in EU policy in early 2015. See here for more information.

    If you are in the EU, VAT will appear on your invoice starting September 1, 2015.

    If you are a registered business, you may enter your VAT ID on your Billing page, and VAT will not be added to your bill. However, please note that registered business still must account for this tax manually.*"

    We may have the Queen on our money. But Canada is not EU.

  • DigitalOcean's term "Canadian customers" is rather ambiguous. Do you mean to say customers that used the Toronto Data Center will be charged GST? Also on that note, will the monthly fee then also be charged in CAD or USD?

  • You can't demand USD if you want to collect Canadian tax. You can't use PayPal data (payees's billing address included) as your base for taxation.

  • DO should provide option to be paid in a local currency of residence provided TO Digital Ocean, and not pull address from Paypal to which PayPal nor payee has consented for you to use for taxation purposes. Hopefully you will attend to these issues before actually sending out bills with taxes.

  • I just noticed this as well, first off, I prepaid from Paypal, using USD currency that I already had in that account, that was paid to me in USD.

    So why the hell am I paying GST off this? .. If Im paying from USD to USD. I don't see why I need to pay Canada... Hell I might not even spin up from Toronto.

4 Answers

Yes! We have opened up a subsidiary office in Canada. For more information regarding Canadian sales taxes, please see our Tax FAQ.

There's more news to come, so keep tuned on Twitter and our blog for future updates.

  • If DO starts charging HST on their bills in USD i'm gone.. Give us CAD pricing since this service is becoming increasingly expensive due to the exchange rate!

    Side note.. if there's more "news to follow" and there is new CAD pricing.. Don't freak out your customers by announcing the tax first!

  • It totally confused me when I got the email. Maybe you should have put this information in the email or the FAQ. Starting to charge tax all in a sudden with the obscure explanation like "according to Canadian laws" is not a good way to inform your customers. I was wondering: Why now? Anything changed?

    Also wondering about any plans for the CAD pricing.

  • You are charging HST in USD on the invoices.

    I'm sorry but this seems like a cash grab.

    There are no other US server companies that I use who charge USD and add Canadian HST to their invoices.

    • Totally Agree.
      Even Go Daddy and Amazon don't charge international customers including Canada. This is illegal practice to apply additional costs on top without any reasons. Digital Ocean has corporate offices in USA (New York and Cambridge,MA).

Digital Ocean, perhaps you can take this answer here to your guys wearing suites, who's never written a line of code. Here it goes: Your main persona customer demographic is your sole developer, small/size agency, and the nerd spinning up servers to test his apps. You have grown and you've also helped your main customers mentioned above grow as well. So now you are being introduced to other customers such as corporate clients who's developers are on the personas mentioned above.

You get it right? Well, guess what? I belong to that demographic as well. Over years I've been setting up servers for my clients whom some are individual entrepreneurs to small businesses to medium size corporations. I have done this successfully because DO is amazing.

Now, you are charging an additional tax. What does this mean? In my case, my paypal account is Canadian and It means that, your true price of a droplet is $10 + 7% HST. It also means that id my server costs me $100, I will pay $107.

Great so now since I know AWS very well and been launching servers with them over the years, I can now compare AWS with DO+HST

This also means that you will have a lot of losses. Because of your guys dressed in suites with Macroeconomic backgrounds took some decisions without consulting your hard working Marketing Team who worked so hard to build all your campaigns, articles, channels etc. All that work just pooof.. blown away. I suggest that you revise your decision and only the people who made Digital Ocean great, only those grinders, who started DO from the ground up, only those people will understand. Because they know how hard it is to build a great company from startup to what you have now.

So, either you change your model, or you will have to face the consequences of being compared to other competitors such as Google Cloud Platform, and AWS (you may think, they are not really competitors) If you think like that, you will not be competing at all.

I hope this helps you.

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