Non-resident businesses selling digital products, services or goods shipped from Canadian fulfilment warehouses to Canadian consumers may need to register for GST/HST once taxable supplies to Canadian consumers exceed CA$30,000 over 12 months. Many can use the CRA's simplified registration, which lets them collect and remit tax without claiming input tax credits.
Canada has expanded its sales tax rules to cover the digital economy. If you're a UK, US or European business with Canadian customers, here's how to tell whether you need to register.
Who the rules target
Since 1 July 2021, GST/HST obligations apply to:
- Non-resident vendors of digital products and services, such as SaaS, streaming, apps and online courses, sold to Canadian consumers
- Distribution platform operators facilitating those sales
- Sellers of goods shipped from fulfilment warehouses in Canada
The CA$30,000 threshold
Registration is generally required when your taxable supplies to Canadian consumers exceed CA$30,000 in a 12-month period. Track sales by customer location from the start of your Canadian sales.
Simplified vs normal registration
| Simplified registration | Normal registration | |
|---|---|---|
| Who | Non-resident vendors and platforms selling to consumers | Businesses carrying on business in Canada, or registering voluntarily |
| Input tax credits | Not available | Available |
| Filing | Online, simplified returns | Standard GST/HST returns |
What rate to charge
Charge the rate for the customer's province: GST in some provinces, HST in harmonizing provinces. Several provinces also have their own provincial sales tax rules for digital supplies, so check each one.
Practical steps
- Capture each customer's Canadian province at checkout
- Track consumer sales against the threshold
- Choose simplified or normal registration
- Configure tax calculation in your billing or ecommerce platform
- File and pay on the CRA's schedule
How Avore Solutions can help
Our cross-border tax team handles GST/HST registration, returns and US–Canada tax planning. Get in touch.
Frequently asked questions
What is the difference between GST and HST?
GST is the 5% federal goods and services tax. HST is a harmonized federal-provincial tax charged instead of GST in participating provinces such as Ontario and the Atlantic provinces. Other provinces may charge a separate provincial sales tax.
What is simplified GST/HST registration?
A streamlined regime, in force since July 2021, for non-resident vendors and platform operators supplying Canadian consumers. Registrants collect and remit GST/HST but cannot claim input tax credits under it.
Do B2B sales count towards the threshold?
The simplified regime focuses on supplies to consumers who are not GST/HST registered. Business-to-business supplies to registered customers are treated differently, so review your customer mix carefully.