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

If you own a Shopify store based in Canada, you’ll need to understand when to charge Federal and Provincial taxes.
The simplest rule for when to charge Canadian sales tax or not is whether your Shopify store is GST/HST registered.
Many businesses in Canada start as unregistered and the state classifies them as a small supplier. Canadian businesses are required to register for a GST/HST number when they surpass a minimum threshold of CAD $30,000 within a calendar quarter.
Let’s dive in and figure out all the tax rules that apply to Shopify stores operating out of the Great White North.
For more information, check out our GST/HST guide for Shopify stores in Canada: go.sufio.com/c...
Learn more about GST/HST rates on different types of supplies: www.canada.ca/...
Sufio is the leading invoicing app for Shopify merchants worldwide, including the UK. Our powerful and automated solution makes invoicing easier than ever, leaving you with more time to focus on growing your business. Whether you’re about to launch your first ever store or you’ve already made it a household name, you can count on Sufio’s customer success team to help you configure both your invoices and taxes with compliance in mind.
Start your 14-day free trial today to experience the peace of mind automated invoicing provides: apps.shopify.com/sufio?ref=KZbin_cctnhXeXOu0
⚠️ While we’re happy to make educational videos about setting up Shopify taxes, we encourage you to speak to a local tax authority regarding your tax duties.
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Here's what we'll cover in this video:
0:00 - Introduction
0:14 - GST/HST in Canada
0:51 - Not GST/HST registered
1:17 - GST/HST registered
1:55 - GST, PST, HST or QST?
2:24 - Selling B2C and B2B
2:54 - Zero-rated, tax exempt goods
3:41 - Digital goods
4:18 - International sales
4:52 - Set up taxes in Shopify store

[@FreakyP]

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

[@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?

[@ayeshachd]

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

[@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?

[@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!

[@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

[@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.

[@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!

[@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.

[@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.

[@user-jm9ux5bc9e]

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.