Currently, the threshold to be required by the Canada Revenue Agency (CRA) to collect sales tax on your Canadian sales is when you are making sales of 30,000 CAD worldwide within four consecutive semesters, which do not necessarily need to align with the calendar year.

This means that you could need to start collecting tax in the middle of a given year; it will not necessarily apply as of January 1st of a given year.

It is however not necessary to wait until you are making sales of 30,000 CAD and in some cases when selling through an online platform, the online platform will collect taxes on your sales even if you do not reach the 30,000 CAD limit. Voluntary registration is possible in most cases for non-resident sellers.

Following is the list of agencies with different sales tax requirements and a summary of some of their rules.

Yes, every province has different rules of what is tax-exempt or has a different rate.

While some products are exempt from tax, some are also considered to be zero-rated.

Your seller portal might have special tax codes for all the different products that might have different rates. Click below for a complete list of exempt supplies in each province,

GST, QST, BC, SK, MB

Suppose you have made taxable supplies in Canada, and you have been above the threshold to collect taxes in any of the jurisdictions where you sold. In that case, the government can go back and audit you and charge you the whole amount you should have been collecting plus interest and penalties per their determination.

No. You don’t have to open a new corporate entity in Canada. However, you have to register your existing business with the CRA as an NRI (Non-Resident Importer). You will get a Canadian Business Number and all the necessary Tax Accounts.

• GST – Goods and Services Tax = The federal sales tax when a provincial sales tax also applies or where the government has not come to an agreement with a province for HST to apply.
• HST – Harmonized Sales Tax = The federal sales tax, when it is collected in partnership with the Provincial government further to an agreement with the federal government, it is also being filed and paid with the GST Remittance.
• QST – Quebec Sales Tax = The sales tax the is being collected, filed, and remitted in the province of Quebec, with the MRQ – Ministère du Revenu du Québec
• PST – Provincial Sales Tax = The sales tax is being collected, filed, and remitted to the provincial government in British Columbia, Manitoba and Saskatchewan.
• RST – Retail Sales Tax = An old term sometimes used to refer to sales tax in Canada.

No. You do not have to include it. The Canadian Sales tax is being collected on top of the sales price and then remitted and paid back to the different government agencies.

Yes. The HST, GST, and QST systems are VAT (Value Added Tax) systems. That means that if you are registered and collect any type of sales tax, you can claim back that tax type if you have any expenses where you had to pay that specific type of tax. This tax claimed back is called an “input tax credit.”

With regards to PST, a mechanism exists that allows PST registrants to be exempt from PST on items purchased for resale under certain conditions, but no input tax credits on purchases are granted contrary to the HST, GST, and QST systems.

It will depend on your sales volume. Every government agency has a different way of determining how often you have to file and pay your taxes. In some cases, a more extended filing period can be obtained if installment payments are made throughout the period. We recommend you consult a tax advisor to get information with regards to your specific situation.

There is nothing to lose when you register! And most of the time, you have a lot to gain…

You could be able to claim back whatever GST you paid. For example, When you are importing into Canada, you pay 5% of the value imported. Under certain circumstances, when you are registered in GST and collecting GST, you could be eligible to claim this GST on imports back.

Additionally, you reduce your risk of being audited and having to pay all those taxes out of your pocket