Ecommerce Tax Canada: Complete Guide for Online Sellers

GST/HST on online sales, provincial sales tax obligations, cross-border selling, and digital services — all the tax rules Canadian e-commerce businesses need to know.

GST/HST on Canadian Ecommerce Sales

If you sell goods or services online to Canadian customers and your revenues exceed $30,000 in any rolling 12-month period, you must register for GST/HST and charge the appropriate rate based on the customer's province. Your e-commerce platform (Shopify, WooCommerce, etc.) should be configured to collect the correct provincial rate automatically.

For physical goods shipped within Canada, the GST/HST rate is based on the delivery address (destination principle). For digital services and downloads, the same destination-based rule applies.

Provincial Sales Tax (PST/RST/QST) for Online Sellers

Provinces that have not harmonized with the GST (BC, Saskatchewan, Manitoba, and Quebec for QST) have separate provincial sales tax obligations that apply to online sellers:

Province	Tax	Rate	Online Seller Registration Threshold
British Columbia	PST	7%	$100 CAD in BC sales over 12 months
Saskatchewan	PST	6%	Any taxable sales to SK residents
Manitoba	RST	12%	Any taxable sales to MB residents
Quebec	QST	9.975%	$30,000 CAD in Quebec sales

Digital Services and the GST/HST Rules

Since July 2021, non-resident digital platforms (Netflix, Spotify, Adobe, etc.) are required to register for and collect GST/HST on digital services sold to Canadian consumers. For Canadian e-commerce businesses selling digital products (software, e-books, courses, SaaS), standard GST/HST registration and collection rules apply as with any other business. Stripe, PayPal, and major Canadian payment processors support automatic tax calculation.

Selling to US Customers: Do You Collect US Sales Tax?

If you are a Canadian business selling to US customers, US state sales tax obligations depend on whether you have "nexus" (economic or physical presence) in a US state. Post the 2018 South Dakota v. Wayfair Supreme Court ruling, many states now impose economic nexus thresholds (typically $100,000 in sales or 200 transactions annually). If you regularly sell into major US states, consult a US tax advisor or use a platform like TaxJar or Avalara to manage compliance. You do not charge Canadian GST/HST on sales to non-Canadian customers.

Import Duties and Customs on Shipments

When shipping physical goods internationally from Canada, your customer may be responsible for import duties in their country. For US shipments, goods under $800 USD typically qualify for de minimis exemption (no US duty). For Canadian businesses importing goods for resale, you pay Canadian customs duties and GST at the border — this GST is recoverable as an ITC on your GST/HST return.

Marketplace Facilitator Rules

If you sell through Amazon.ca, Etsy, or other marketplace facilitators, the platform collects and remits GST/HST on your behalf for sales made through their platform (as of July 2021 rules). However, you are still responsible for GST/HST on sales made through your own website. Keep this in mind when calculating your total taxable supplies and remittance obligations.

Key Ecommerce Tax Deductions

• Platform fees (Shopify, Amazon, Etsy) — fully deductible
• Payment processing fees (Stripe, PayPal) — fully deductible
• Shipping and fulfillment costs — fully deductible
• Cost of goods sold (COGS) — deductible against revenue
• Digital advertising (Google, Meta, TikTok ads) — fully deductible
• Packaging materials — deductible
• Home office (if operating from home) — proportional deduction