How to set up Canadian taxes in your Shopify store in 2024

[@MichelleWardforgottenfarms]

Thank you so much - so clear and concise!

[@andreasuarez4971]

Great video! Curious about when shipping overrides are used?

[@Sufio]

Great question! Shipping overrides in Shopify are used to set specific tax rates for shipping charges that differ from your standard settings. This is handy for special conditions or unique tax rules in certain regions. More on that here: help.shopify.com/en/manual/taxes/tax-overrides#:~:text=or%20on%20shipping-,charges,-You%20can%20specify

[@AcuraAdvice]

Thank you so much! This has been a great help in setting up my merch store for my KZbin channel. For selling from Canada to the US, you mention setting up a zero percent tax rate, do I need to do that right away, or is it not necessary until I break the 30k threshold and start charging tax in Canada?

[@FreakyP]

Thank you so much for not just the information, but with the examples on Shopify. Much appreciated.😀

[@ThaKid14]

Is Shopify Tax enough to have running? I’m based out of Ontario. Not sure how to set up international taxes? Do I need a sales tax ID for Every region?

[@kbee33]

Did you ever find your answer? I'm in Alberta and wondering the same thing for my Shopify store. And for selling to other countries. It's too complicated!

[@ThaKid14]

@@kbee33 I’m pretty sure having shopify tax is enough. I set my currency for Canadian Dollars and for my home market I have tax information set up so any product in Canada is charged tax. Anything that’s abroad will have its on duty fees I thiiiink that’s how it works? So recently I shipped to Ireland. It wouldn’t make sense for someone from Ireland to pay tax on a product that isn’t used here - so I think those numbers are crunched into the Canada Post shipping cost price and if there is any VAT the customer will just have to pay it when the item reaches their destination. Don’t quote me on that but that’s how I’ve come to kinda understand it.

[@Makeup360]

@@kbee33you just have to charge tax within Canada you don't need to charge International deliveries

[@kbee33]

@@ThaKid14 thanks

[@Sufio]

Hey! Thanks for your question. As others have mentioned, if you’re based in Ontario, setting up collections in your Shopify admin is enough and works well for handling Canadian taxes, like HST, on sales within Canada. For international sales, the rules can vary. If you don’t have any other tax registrations in other countries, you generally won’t need to charge tax on those sales. Hope that helps!

[@britneychapleau4172]

I'm trying to set up my shopify taxes for status cards, but only for specific products and only for specific customers. because some of my product does no qualify for tax exemption. I already created a Tax-exempt collection and added it to the section under taxes and duties. the issue is its also tax-exempting the product that does not qualify for exemption? ive been talking to shopify AI and he is not very helpful. Hopefully you can get back to me soon. Thanks

[@Sufio]

Hi! Thanks for reaching out. The issue you’re describing could be happening because Shopify might be applying the exemption to the entire collection, even for products that shouldn’t qualify. To resolve this, double-check the products included in your tax-exempt collection and ensure that only the tax-exempt items are added. If the issue persists, it might be worth reaching out to Shopify support directly.

[@shmeeeeeeeeeee]

So just to confirm, if I am making under $30,000 quarterly (or is it annually?) I do not need to set up and charge taxes on my products?

[@Sufio]

Yes, the $30,000 CAD threshold you’re referring to is annual, not quarterly. In Canada, if your total revenue from taxable supplies is less than $30,000 CAD over four consecutive quarters (which is a rolling 12-month period), you are considered a small supplier. This means you are not required to register for GST/HST or charge taxes on your products. However, once your revenue exceeds this threshold, you must register for GST/HST and start charging taxes. Let me know if you need further clarification!

[@shmeeeeeeeeeee]

@@Sufio Thank you for taking the time to explain! :)

[@giftnestshop]

Hi Djimi and thank you for this very informative video. Just to confirm that i got it right, I am setting up an online store in Montreal and from what I understood, i don't need to register for GST/HST for now and won't be charging any taxes until i hit the 30K threshold. However I am paying taxes to my supplier (outside Canada) when i purchase my products to resell, so do I need to keep record of those taxes to claim them later? I am selling for Canada and internationally, so do i need to charge any taxes for my international customers? and if so should I do this now or when I reach the 30K threshold? thank you again for your support and hope to hear back from you.

[@Sufio]

Thank you for your questions and for watching the video. You are correct that in Canada, businesses do not need to register for GST/HST or charge these taxes until their annual taxable revenues exceed the $30,000 threshold. Until you reach this limit, you are considered a small supplier, and registration is not required. However, you can opt for voluntary registration, which would allow you to charge GST/HST and claim Input Tax Credits (ITCs) on your business expenses. Regarding the taxes you pay to your supplier outside of Canada, if they do not charge GST/HST, there is nothing to claim. If you decide to register for GST/HST voluntarily, you can keep records and claim ITCs on eligible business expenses, which can help reduce your overall tax payable. When it comes to charging taxes for international customers, GST/HST usually does not apply, as international sales are generally considered zero-rated exports. This means you do not need to charge GST/HST on these transactions. However, be aware of any tax obligations in your customers' countries, as you may need to comply with those separately. If you haven’t reached the $30,000 threshold, you do not need to charge any taxes yet. I recommend consulting with a tax professional or the Canada Revenue Agency (CRA) to ensure you are fully compliant and making the most advantageous choices for your business. Hope this helps!

[@brentcoburn9119]

I am a sole proprietor, I have a Print on Demand Shopify store that is linked to Printify as my supplier. I sell Print on Demand products to the Canada and USA market only. Since Printify is handling all of the shipping for me am I sales tax exempt?

[@muddassirmalik186]

Did you find an answer? I am in the same situation.

[@Sufio]

Hey @brentcoburn919. It's important to clarify a few things to determine your sales tax obligations. The key factors include who invoices the customer and the location of your business in relation to your customers. Printify handling the shipping doesn’t automatically exempt you from sales tax responsibilities. In the US, you need to consider whether you have a 'nexus' in any state where you sell goods. A nexus is typically established through physical presence, economic activity, or both, and it obligates you to collect sales tax in that state. If you are buying products from suppliers to resell them, you might be eligible for a resale exemption, which allows you to purchase goods without paying sales tax. To do this, you’ll need to obtain a resale certificate valid in the states where you do business. Remember, these rules vary by jurisdiction, so it’s a good idea to consult with a tax professional to ensure compliance.

[@Bir_Singh]

What about customs when something is coming from china who pays that?

[@Bir_Singh]

What about custom duties if something is coming from china

[@Sufio]

When importing goods from China to Canada, customs duties and taxes apply. Duties depend on the product's HS code, while GST (5%) is charged on the value plus duty. Additional provincial taxes (PST/HST) may also apply. For detailed rates, check out the Canada Tariff Finder or consult a customs broker to ensure compliance. Hope this helps! www.cbsa-asfc.gc.ca/import/guide-3-eng.html

[@mact2531]

It was well explain thank you very much :)

[@Sufio]

Thank you so much for your kind words! Glad you found it well explained. 😊

[@Safeer-Cyphershop]

Thanks a bunch for practicably useful informatin.

[@Sufio]

You’re very welcome! I’m glad you found the information useful. Thanks so much for watching and supporting our channel!

[@georgettejatas5578]

This was a very good video, thank you! The one thing not mentioned was what to do in the tax section if we are just starting out (and sales are under $30K). Do we need to display a zero tax rate in thst case too? How do we do that? Additionally, when sales start to increase in volume from across Canada and the US, how does one keep track of customers mailing addresses in order to collect taxes? Is there a report we can generate on Shopify?

[@Sufio]

Hey! Thanks for the kind words and for watching the video! If you’re just starting out and your sales are under $30,000, you don’t need to charge sales tax yet (since you’re below the GST/HST threshold in Canada). In this case, you shouldn’t display a 0% tax rate, as you’re not collecting any taxes. As for keeping track of customer addresses for tax purposes when your sales grow, Shopify automatically records customer details, including addresses. You can generate a report by going to the Analytics page. Hope that helps!

[@nazariitorko]

Thank you for a great video! If I run Shopify store from Canada, does it mean that I charge taxes only Canadian buyers? What about US, UK and EU customers? If I sell internationally, is it 0 tax, but I still need to set up 0 tax in my Shopify store?

[@Sufio]

Hi! Thanks for watching and for your question! 😊 If you’re running a Shopify store from Canada, how you charge taxes depends on where your customers are. Generally speaking, for Canadian customers, you’ll need to charge the relevant taxes (GST/HST, PST, or QST) based on their province. For international sales-like the US (if you don’t have nexus) or EU countries-you won’t charge tax, but make sure to set up a 0% tax rate in Shopify to reflect that correctly. It’s always a good idea to double-check with a tax expert to ensure everything is set up properly for each region. Hope that helps!

[@carcajouvapeur9749]

I live in Canada and I have a shopify store where i make few EU sales each month (digital products), I am not charging any taxes yet because I make below 30k, but I was doing some research and with all the information online I am now confused, do I need to charge VAT taxes to my EU customers?? Also, I will soon be launching merch with Printify, and I wish to sell it to my EU costumers, will i need to collect their local taxes?? All of this is pretty confusing to me..

[@Sufio]

Hey there! I totally get how confusing tax regulations can be, especially with all the information out there. For your digital products, since you're in Canada and selling to EU customers, you do need to charge VAT, regardless of how much you're making. The EU has specific rules for digital products (like e-books, online courses, etc.) that require sellers from outside the EU to charge VAT at the rate of the customer's country. This means you’ll need to register for VAT in an EU country to comply with these rules. When it comes to the merch you'll be launching with Printify, the situation is a bit different. If you're below the VAT threshold for distance sales, you don’t need to charge VAT initially. But once you exceed that threshold, you’ll need to register for VAT and start charging the local VAT rates, using the IOSS scheme. I hope this clears things up a bit! However, I highly recommend reaching out to a licensed tax advisor to ensure you’re fully compliant with all regulations and to get advice tailored to your specific situation.

[@carcajouvapeur9749]

@@Sufio This helps me a lot, thank you for your response!

[@DusKed]

Hey, Thank you for the great video! I just had a few inquiries, so if I live in Alberta, and make less then 30,000 would shopify give some sort of tax document to help pay the income tax? If so what documents do they provide? Since I make less than $30,000, I only have to pay income tax on the profit right? Thank you for all your help!

[@Sufio]

Hey! Thanks for watching the video and for your questions! If you’re based in Alberta and make less than $30,000 in annual revenue, you’re below the threshold for registering to collect GST/HST, so you don’t need to charge sales tax. However, when it comes to income tax, you still need to report and pay taxes on your business profits, regardless of the revenue amount. Shopify doesn’t provide a specific tax document for income taxes, but they do offer reports that can help to track your sales, and profits, which can then be used to file your income tax return. You can learn more about Shopify reports here: help.shopify.com/en/manual/reports-and-analytics/shopify-reports/report-types Hope that helps!

[@Psyamori]

Hey Jimmy, I'm looking to establish a registered company in Canada but intend to ship my products directly to a US 3PL for my US e-commerce customers. Do I need to include sales taxes in this scenario?

[@Sufio]

Hey, @Psyamori. Establishing a company in Canada with the intent to ship products to a US-based third-party logistics provider (3PL) for distribution to US customers involves specific tax considerations: 1. GST/HST: When you export goods from Canada to another country, such as the United States, Canadian GST/HST generally does not apply to these exported goods. 2. Customs and import Taxes: On entering the United States, customs duties or import taxes may apply unless the goods are specifically duty-free under trade agreements or specific exemptions. 3. US sales tax: The United States does not use a taxation system like Canada. Instead, it employs a sales tax system that is managed at the state level. Depending on the specifics of your operations and the state laws where your 3PL is located, you may need to register to collect and remit sales tax if you meet the nexus criteria in that state. I'd suggest consulting with a tax professional experienced in cross-border commerce, who can provide valuable guidance and ensure compliance with all applicable tax laws.

[@ayeshachd]

I am not registered GST but I have to charge PST (Saskatchewan) . I cant find this option in shopify

[@Safeer-Cyphershop]

Create a Custom Tax Rate: Go to your Shopify admin. Navigate to Settings > Taxes. Click on "Create tax rate". Give the tax rate a name (e.g., "Saskatchewan PST"). Set the tax rate to 6% (the current PST rate in Saskatchewan). Assign the Tax Rate to Products: Go to your product list. Click on the product you want to apply PST to. In the "Pricing" section, find the "Tax" dropdown. Select the custom tax rate you created (e.g., "Saskatchewan PST")

[@Bir_Singh]

What about custom duties if something is coming from china😊

[@Sufio]

@@Bir_Singh When importing goods from China to Canada, you'll need to account for customs duties and taxes. The duty rate varies based on the product's HS code, and GST (5%) is applied to the total value, including the duty. Provincial taxes (PST/HST) might also be applicable. For exact rates, refer to the Canada Tariff Finder or reach out to a customs broker for compliance. More info here: www.cbsa-asfc.gc.ca/import/guide-3-eng.html. Hope this helps!

[@jam4954]

Hello, my shopify store is located in Canada and I have a weird problem, the price is showing two times in CAD but in any other currency the price is correctly showing one time. not really a tax problem but if you can help it would be amazing ! Thank you

[@Sufio]

Hello @jam4954, that certainly sounds like an unusual issue! Have you reached out to Shopify support yet? They would be best equipped to help diagnose and resolve this problem for you.

[@Bir_Singh]

What about custom duties if something is coming from china

[@AyeshaKhan-r5l]

hiiii Can you please respone to me ...I am so stuck I start print on demand work with printify and integerate my shopify store with printify but at this point i am stuck of taxes and duties i am from Pakistan (country) and want to sell Internationaly so can you please tell me that i will set taxes like you tell in yr video? pleasee telll mee I am so thankful to uhh...

[@Sufio]

Thanks for reaching out with your question. When it comes to setting up taxes for international sales via your print-on-demand service through Shopify and Printify, the details can indeed get complex. Here’s a simplified breakdown to help guide you: 1. Location of your business and customers: Knowing where your business is officially based and where your customers are located is crucial. Since you're operating from Pakistan and targeting international customers, different tax rules apply depending on each customer's country. 2. VAT and customs duties: Typically, VAT (Value Added Tax) is charged to the final customer in the country where the goods are consumed. As an international seller, you might need to register for VAT in each customer’s country if your sales exceed certain thresholds. Additionally, remember that customs duties may apply when shipping internationally, which can affect how much your customers need to pay upon receiving their goods. 3. Specific rules for different regions: 3.1. European Union (EU): You’d be considered a deemed supplier. For consignments under EUR 150, you could opt to register for the Import One Stop Shop (IOSS) to simplify VAT payments. However, if a consignment exceeds EUR 150, the IOSS cannot be used, and VAT and customs duties will typically be the responsibility of the customer unless you arrange to pay these on their behalf. 3.2. United States (US): Sales tax requirements vary by state. You only need to collect sales tax in states where you have a nexus, which can be a physical presence or a sales threshold that you surpass. Given the complexity and the potential financial implications, I strongly recommend consulting with a tax professional who can provide specific guidance based on the full scope of your business operations. This will ensure compliance and help you understand all applicable tax obligations fully.

[@lisalaurin5805]

My Shopify store is mainly children's clothing and shoes along with other children's products based in Ontario Canada. The PST portion is not taxed on these items. I have added tax overrides for each collection andwhen I add children's clothing to checkout the override is not working. How to correct? Or, how to contact Shopify to report the error? I need a real person to speak with.