Canada E-Commerce Tax Guide
the e-commerce tax rules in Canada. The GST/HST registration threshold — the "online seller must register for the GST/HST when the worldwide taxable revenue exceeds $30,000 in the 4 consecutive quarters". The digital economy GST/HST rules — the "GST/HST applies to the digital products, the online services, and the e-books sold to the Canadian consumers". The marketplace facilitator rules — the "Amazon, the Etsy, the eBay, and the Uber are the 'marketplace facilitators' — they are responsible for the GST/HST collection on the third-party sales". The Amazon.ca is the "marketplace — the Amazon collects and remits the GST/HST on the seller's behalf". The cross-border e-commerce — the "low-value goods import (the $20 to $40 threshold)", the "de minimis threshold for the customs duties", the "CBSA customs clearance for the high-value goods". The e-commerce deductions: the "website hosting and the domain fees", the "advertising (the Google Ads, the Facebook Ads)", the "shipping and the fulfillment costs", the "platform fees (the Amazon referral fees, the Shopify subscription)", and the "software and the tools".
GST/HST for E-Commerce
- Registration threshold: The "worldwide taxable revenue from the e-commerce (the digital products and the services) exceeds $30,000 in the 4 consecutive quarters". The "once registered, the seller must charge the GST/HST on the Canadian sales".
- Digital products and the services: The "software, the apps, the e-books, the online courses, the streaming services, the music downloads, the SaaS, the online consulting".
- Place of supply: The "GST/HST rate depends on the Canadian province of the customer". The "Ontario: 13% HST". The "BC: 5% GST + 8% PST". The "Alberta: 5% GST". The "Quebec: 5% GST + 9.5% QST".
- Simplified GST/HST registration: The "non-resident online sellers can use the simplified GST/HST registration" (the "non-resident registry" — the "no physical presence in Canada required").
Amazon & Marketplace Facilitator Rules
- Marketplace facilitator: The "Amazon, the Etsy, the eBay, the Walmart Marketplace, and the Shopify are the 'marketplace facilitators'". The "facilitator is responsible for the collection and the remittance of the GST/HST on the third-party sales".
- FBA (Fulfillment by Amazon): The "Amazon stores the seller's inventory in the Canadian warehouses" — the "Amazon collects the GST/HST on the sale" — the "seller may need to register for the GST/HST to claim the input tax credits on the FBA fees".
- Amazon.ca seller: The "Amazon.ca automatically collects the GST/HST on the seller's orders" — the "seller reports the sales on the GST/HST return (the line 101 — the sales from the marketplace)".
E-Commerce Business Deductions
- Website and the technology: The "domain name registration", the "web hosting fees", the "website design and the development", the "Shopify or the WooCommerce subscription fees", the "SSL certificates and the security software".
- Advertising and the marketing: The "Google Ads", the "Facebook and the Instagram Ads", the "influencer marketing", the "email marketing software (the Mailchimp, the Klaviyo)", the "SEO tools (the Ahrefs, the SEMrush)".
- Shipping and the fulfillment: The "shipping costs (the Canada Post, the Purolator, the FedEx)", the "packaging materials (the boxes, the tape, the labels)", the "Amazon FBA fees", the "warehouse storage costs".
- Other operating costs: The "platform fees (the Amazon referral fee at 10% to 20%)", the "credit card processing fees (the 2% to 3%)", the "product photography and the videography".
For the GST/HST registration and the returns, see our GST/HST Guide →. For the digital services tax, see our Digital Services Tax Guide →.