Services provided by delivery companies are considered zero-rated interline freight courier services. The freight transportation service is the service of transporting goods (i.e. food and groceries). The courier services schedule and transport the supplies from the shipper to the customer but they are not in the business of making those supplies. Trexity Inc. is considered the invoicing carrier and the service we provide is called courier services. And since the merchant is invoiced by Trexity and not the couriers directly, it will fall under the interlining agreement. Courier services fall under zero-rated supplies, which means you collect taxes at a rate of 0%. In other words, you don’t collect any GST/HST, however, you are able to recover any GST/HST paid by claiming Input Tax Credits (ITCs). So the bottom line is: your duty as a driver working for a zero-rated interline freight courier service is:
- To Register for GST/HST account if your income is more than $30,000. Unless you voluntarily want to register when your income is lower.
- Not to charge the GST/HST since you provide interline freight services
- Claim ITCs on your business expenses only when you register for a GST/HST account.
As stated, couriers are not employed by Trexity, they are independent contractors.The information in this summary does not reflect your personal tax situation and is informative only. Nothing in this summary constitutes tax advice nor an employment relationship between Trexity and you, neither express nor implied.
If you have any questions about your own taxes, please consult a tax professional.