Scaling Your Online Store: Tax Compliance
Selling online opens up a national market, but it also brings the challenge of managing multiple tax rates.
The "Place of Supply" Rule
In Canadian tax law, the tax rate is determined by where the customer receives the goods.
- Ship to Alberta: Charge 5% GST
- Ship to Ontario: Charge 13% HST
- Ship to Nova Scotia: Charge 14% HST
Platform Responsibilities
If you sell through marketplaces like Amazon, Etsy, or eBay, they are often classified as "Distribution Platform Operators." In many cases, these platforms collect and remit the tax for you, but you must still report the sales.
Digital Products
Selling software or digital downloads? The rules are similar. You need to determine the customer's province to apply the correct GST/HST/QST.
Key Checklist for Online Sellers
- [ ] Set up "Tax Zones" in your Shopify/WooCommerce store.
- [ ] Monitor your $30,000 threshold for national registration.
- [ ] Check if you need to register separately for PST in BC, SK, or MB.
Calculate destination-based GST/HST before you ship across provinces →