E-commerce GST/HST Canada — CPA Guide for Online Sellers (2026)

E-commerce GST/HST in Canada is one of the most common areas where online sellers make costly mistakes. Whether you sell on Shopify, Amazon, or Etsy, the rules around registration, collection, and remittance of Goods and Services Tax (GST) and Harmonized Sales Tax (HST) are not optional — and the Canada Revenue Agency actively audits e-commerce businesses that get them wrong. This guide covers everything a Canadian online seller needs to know: when to register, how to determine the correct rate, how major platforms handle collection, and how to file your return without errors.

We wrote this guide based on the same processes we follow with our e-commerce accounting clients at LedgerLogic. It builds on our complete e-commerce accounting framework for Canadian sellers and complements our platform-specific guides for Shopify bookkeeping and Amazon FBA accounting.

Affiliate Disclosure: LedgerLogic is an A2X and Synder partner. We may earn a commission if you sign up through our links at no extra cost to you. We only recommend tools we use with our own clients.

When Must You Register for GST/HST?

The CRA requires you to register for a GST/HST account once your worldwide taxable revenues exceed $30,000 over four consecutive calendar quarters. This is the "small supplier" threshold. Once you exceed it, you must register within 29 days and begin charging GST/HST on all taxable supplies from the date of registration.

What counts toward the $30,000 threshold:

• Gross sales of taxable goods and services (before expenses)
• Sales from all channels combined — Shopify, Amazon, Etsy, wholesale, in-person
• Sales of zero-rated goods (like exports) — these count toward the threshold even though the tax rate is 0%
• Revenue from all associated businesses if you operate more than one

What does not count:

• Sales of exempt goods or services (financial services, certain health products)
• Sales of goodwill when selling a business

Voluntary registration. Even if you are below $30,000, you can register voluntarily. The main advantage is that voluntary registration allows you to claim input tax credits (ITCs) on your business expenses — the GST/HST you pay on inventory, software subscriptions, shipping supplies, and professional services. For most e-commerce sellers with significant startup costs, voluntary registration makes financial sense. See the CRA's GST/HST registration page for the complete eligibility criteria.

The downside of voluntary registration is the administrative burden of collecting, tracking, and remitting tax — and the requirement to charge your customers GST/HST, which increases your prices relative to unregistered competitors. If your customers are primarily businesses (B2B), this is a non-issue because they claim the tax back. If your customers are consumers (B2C), the price increase is more noticeable.

Canadian Sales Tax Rates by Province (2026)

Canada does not have a single national sales tax rate. The rate you charge depends on where your customer is located. This table shows the current rates for all 13 provinces and territories.

PST/RST/QST note: In British Columbia, Saskatchewan, and Manitoba, the provincial sales tax (PST or RST) is a separate tax administered by the provincial government. Quebec's QST is also administered separately by Revenu Quebec. If you sell physical goods to customers in these provinces and meet their nexus requirements, you may need to register for and collect PST/RST/QST in addition to GST. This is separate from your federal GST/HST registration. See the CRA's guide to determining which rate to charge for a full breakdown.

Place of Supply Rules

Place of supply is the single most important concept in Canadian sales tax for e-commerce sellers. It determines which tax rate applies to a given transaction. The rules differ depending on what you sell.

Physical goods (tangible personal property). The tax rate is based on where the customer receives the goods — the shipping destination. If you are located in Alberta but ship a product to a customer in Ontario, you charge 13% HST (Ontario's rate), not 5% GST (Alberta's rate). Shopify handles this automatically at checkout if your tax settings are configured correctly. See the CRA's place of supply rules for the complete framework.

Digital products and services. For digital goods (e-books, courses, software, digital downloads), the place of supply is generally determined by the customer's billing address or the address maintained in the ordinary course of business. If the billing address is in Nova Scotia, you charge 15% HST regardless of where your server is located.

Mixed supplies. Some transactions involve both a physical product and a digital component (for example, a physical product with a digital warranty or membership). The CRA applies rules to determine whether the supply is a single supply or multiple supplies. If multiple supplies, each component may have a different place of supply. This is an area where professional advice is often warranted.

International sales (exports). Goods shipped outside Canada are zero-rated — you charge 0% GST/HST. However, you still report these sales on your GST/HST return as zero-rated supplies. The key benefit is that zero-rated sales still allow you to claim ITCs on the Canadian expenses incurred to produce and ship those goods. This often results in a net GST/HST refund for export-heavy businesses. For a deeper look at tax compliance for Canadian businesses, see our tax advisory services.

How Shopify, Amazon, and Etsy Handle Tax Collection

Each major e-commerce platform handles GST/HST differently. Understanding your obligations on each platform is critical to avoiding compliance gaps.

Shopify

Shopify calculates and collects the correct GST/HST at checkout based on your customer's shipping address. However, Shopify does not remit the tax to the CRA on your behalf. The collected tax flows through your Shopify payouts as part of the net deposit. You are responsible for tracking what was collected by province and filing your GST/HST return.

This is where proper bookkeeping infrastructure becomes essential. Tools like A2X or Synder automatically separate the tax component from your Shopify payouts and map it to the correct tax accounts in Xero. Without this automation, manually extracting tax data from Shopify reports is time-consuming and error-prone.

For the complete Shopify bookkeeping workflow, see our Shopify bookkeeping guide.

Amazon

Amazon operates as a marketplace facilitator in Canada. Since July 2022, Amazon is required to collect and remit GST/HST on sales fulfilled through the Amazon.ca marketplace. This means Amazon handles the tax calculation, collection, and remittance to the CRA for marketplace-facilitated sales.

However, you still have filing obligations. Even though Amazon collects and remits the tax, you must report the Amazon-facilitated sales on your own GST/HST return. The CRA expects to see these sales reported as marketplace-facilitated supplies. If you do not report them, your return will not match what Amazon has reported, which can trigger a review.

For detailed guidance on Amazon accounting in Canada, see our Amazon FBA accounting guide.

Etsy

Etsy operates under similar marketplace facilitator rules as Amazon. Etsy collects and remits GST/HST on sales made through the Etsy marketplace to Canadian customers. Like Amazon, you are still required to report these marketplace-facilitated sales on your GST/HST return, even though Etsy has already remitted the tax.

The key takeaway across all three platforms: even when a marketplace collects and remits GST/HST on your behalf, you must still report those sales on your return. The CRA uses data matching to compare what platforms report with what sellers report. Discrepancies are a common audit trigger.

Filing Your GST/HST Return

Your GST/HST filing frequency is determined by your annual taxable revenue:

• Annual filing: Revenue of $1,500,000 or less — you can file once per year
• Quarterly filing: Revenue between $1,500,001 and $6,000,000 — you must file quarterly
• Monthly filing: Revenue over $6,000,000 — you must file monthly

Most e-commerce sellers start on annual filing and may voluntarily elect quarterly filing for better cash flow management (especially if you regularly receive refunds due to zero-rated exports).

What to include on your return:

• Line 101 — Total taxable sales: All taxable revenue including zero-rated sales and marketplace-facilitated sales
• Line 105 — GST/HST collected or collectible: The total tax you collected (or should have collected) on your direct sales. Do not include tax collected by marketplace facilitators here
• Line 108 — Input Tax Credits (ITCs): The GST/HST you paid on business expenses that you are eligible to claim back
• Line 109 — Net tax: Line 105 minus Line 108. If negative, you receive a refund

For a complete step-by-step walkthrough of the filing process, see our detailed GST/HST return filing guide.

Automation with Xero + A2X. If your books are set up correctly in Xero with A2X or Synder handling your platform data, preparing your GST/HST return is straightforward. Xero's GST/HST report pulls the figures directly from your reconciled transactions, giving you the numbers you need for each line of the return. This is the workflow we use for all of our e-commerce accounting clients.

Common CRA Audit Triggers

The CRA uses data analytics and cross-referencing to identify e-commerce sellers for audit. These are the most common triggers we see in our practice.

1. Claiming ITCs without supporting documentation. Every ITC claim must be supported by a receipt or invoice that includes the supplier's GST/HST registration number, the date, the amount of tax paid, and a description of the goods or services. If you cannot produce this documentation during an audit, the CRA will deny the ITC and assess you for the amount plus interest.

2. Inconsistent revenue between platforms and tax return. The CRA receives data from marketplace facilitators (Amazon, Etsy) and can compare it against what you report. If Amazon reports $200,000 in facilitated sales and your return shows $150,000 in total revenue, you will hear from the CRA.

3. Late filing or non-filing. Consistently filing late or missing filing periods is a red flag. Late filing also triggers automatic penalties: 1% of the amount owing plus 0.25% for each month the return is late, up to 12 months.

4. Large ITC claims relative to revenue. If your ITCs exceed your collected tax by a significant margin (common for new businesses or export-heavy sellers), expect the CRA to request documentation before issuing a refund. This is not necessarily an audit — it is a standard verification. Having clean, reconciled books makes these verifications painless.

5. Not reporting marketplace-collected tax. As noted above, even though Amazon and Etsy collect and remit GST/HST, you must report these sales on your return. Omitting them creates a data mismatch that the CRA's automated systems will flag.

Frequently Asked Questions