>Michel, I'm trying to understand the logic. Did anybody explain why the government feels that someone who buys your service in, say, Bulgaria, might use it in Canada and therefore must be taxed, while a Bulgarian who buys shoes by mail couldn't possibly ever use those shoes in Canada, so doesn't need to pay a taz? Or do I completely misunderstand what they mean when they say 'may be used in Canada'.

The ruling states:

"When the place of negotiation is in New Brunswick and the IPP is no used exclusively outside New Brunswick, the place of supply is in New Brunswick and tax is charged at a rate of 15%."

New Brunswick here is the same as Canada as we have harmonized sales tax thus 14%. At the time the ruling was done, the tax was 15%.

So, this is why as a last resort, if we loose our appeal, our last option to keep this product running will be to ban the use of this service in Canada which might (as per the last meeting I had with them, this will probably be accepted as is) satisfy the CRA since the ruling is based on the possibility of use in Canada. As mentioned in the article, that would then alienate the Canadian customers, of course.