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Canadian Tax Issue with PayPal

HI,

I see there's been a lot of discussion in the forum about the application of taxes to orders. I too am having a problem with it and I haven't seen anything that is of help. Here's the issue. I have my PayPal business account (standard) set up to apply federal GST (5%) and provincial PST (7%). The taxes are listed as "active" in PayPal. When I make a test purchase, the taxes are not applied to the order. I understand from the forum that this is not an issue with DLGuard (although it's a bit mis-directing as DLG does set the price) and is an issue with PayPal. Unfortunately I just cannot see anything wrong with the PayPal set up. Can you please advise? Or...can you log in and take a look? Since there are so many questions about taxes on the forum, I'd be more than happy to post the findings up here to help the next guy out. 
 
Please help. 
 
I did not find the right solution from the internet. 
 
References:- 
http://www.dlguard.com/forum/viewtopic.php?t=4075&sid=14c5a13f50bf681ce9e98bbc79085a19

 

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