A US-based ecommerce brand does $500,000 a year in sales. Maybe $18,000 of that trickles in from Canadian customers who found the product on Instagram or through a marketplace listing. The owner has never filed a Canadian tax return, never registered with the CRA, and assumes that because Canadian revenue is a rounding error, Canadian tax obligations are too.
They are wrong, and the mistake compounds every quarter it goes uncorrected.
Canada's GST/HST registration threshold is one of the most commonly misunderstood rules in cross-border ecommerce, because it is calculated on worldwide sales, not sales made to Canadian customers. A seller with zero Canadian revenue and $40,000 in US sales alone can already be past the threshold. The $18,000-a-year seller in the example above crossed the line years before their first Canadian sale even happened, because their total global revenue is what counts.
What GST/HST Actually Is
The Goods and Services Tax (GST) is Canada's federal consumption tax, charged at 5% on most goods and services. Five provinces have combined their provincial sales tax with the federal GST into a single Harmonized Sales Tax (HST), charged at a single rate ranging from 13% to 15% depending on the province. It functions similarly to US state sales tax in that it's collected from the end customer at the point of sale, but the mechanics of who has to register, when, and how are meaningfully different from anything a US-only seller has dealt with before.
If you sell into Canada — whether through your own website, a marketplace, or a platform like Shopify — GST/HST rules apply the moment your product or service reaches a Canadian customer, regardless of where your company is incorporated or where your inventory sits.
The CA$30,000 Threshold: Worldwide, Not Canada-Only
This is where nearly every US seller gets tripped up.
A "small supplier" — someone exempt from mandatory GST/HST registration — is defined as a business whose total worldwide taxable supplies were CA$30,000 or less in a single calendar quarter and over the trailing four consecutive calendar quarters combined. The moment your global revenue crosses that line, in either measurement window, the small-supplier exemption disappears and registration becomes mandatory.
Read that again: worldwide. Not Canadian. Not "sales shipped to Canada." Your total sales, everywhere, in every currency, count toward the CA$30,000 test. A US company doing $500,000 in domestic US sales and $0 in Canada is already obligated to register the instant it makes its first taxable sale to a Canadian customer, because its worldwide revenue is nowhere near "small."
Once you're over the threshold, you generally have 30 days to register for a GST/HST account with the Canada Revenue Agency (CRA). From that point forward, you're expected to charge and remit GST/HST — 5% GST or 13-15% HST depending on the customer's province — on every taxable sale to a Canadian customer, whether or not you've gotten around to registering yet.
"But I Don't Have a Canadian Business" — Doesn't Matter
The traditional concept of "carrying on business in Canada" (having a Canadian office, employees, or inventory) used to be the trigger for GST/HST obligations. That changed in 2021, when Canada extended the rules specifically to cover non-resident vendors selling remotely into the country — the same policy shift most countries have made in response to the growth of cross-border ecommerce.
Under the digital-economy rules, non-resident vendors and the platforms they sell through can be pulled into GST/HST obligations even with zero physical presence in Canada, if:
- Their qualifying sales into Canada exceed the CA$30,000 threshold, or
- They have goods sitting in a Canadian fulfillment warehouse (a common trap for Amazon FBA sellers who use Canadian fulfillment centers without realizing it creates a tax footprint), or
- Goods are shipped from a Canadian location to a Canadian purchaser under certain platform arrangements.
If you use Fulfillment by Amazon and any of your inventory has ever been routed to a Canadian warehouse — even automatically, without your explicit choice — that alone can be enough to require registration, separate from the revenue threshold.
Marketplaces Now Collect Some of This For You (Sometimes)
Since July 1, 2021, distribution platform operators — think large marketplaces — are required to collect and remit GST/HST on behalf of non-resident vendors who aren't themselves registered for GST/HST. This is the same "marketplace facilitator" concept US sellers already know from state sales tax law: Amazon, for example, may collect and remit GST/HST on your behalf on marketplace sales if you're not separately registered.
The catch: this only covers sales made through the platform under specific conditions. It doesn't cover sales through your own website, doesn't necessarily cover every product category, and doesn't relieve you of the underlying registration obligation once you cross the CA$30,000 mark and stop qualifying for platform-collected treatment. Relying on "the marketplace probably handles it" is a bet, not a compliance strategy — verify what your specific platform actually remits on your behalf, and for which sales channels.
Normal Registration vs. the Simplified Regime
Once you're required to register, you have a choice between two tracks:
Normal (traditional) GST/HST registration treats you like any other Canadian-registered business. You can claim input tax credits (ITCs) — reclaiming GST/HST you paid on Canadian business expenses, like shipping or Canadian ad spend — but the application typically requires more documentation and, in some cases, a Canadian representative or security deposit.
Simplified registration, built specifically for non-resident digital-economy and distribution-platform sellers with no Canadian presence, is faster to set up — no Canadian address or representative required, and you can apply through the CRA's online portal. The tradeoff: registrants under the simplified regime cannot claim input tax credits. If you have meaningful Canadian business expenses (Canadian warehousing, Canadian marketing spend, Canadian contractors), that lost ITC opportunity can outweigh the simplicity, and normal registration may cost less overall despite the extra paperwork.
Under the simplified regime, returns are typically filed quarterly, applying the customer's provincial GST/HST rate to Canadian taxable supplies and remitting the net tax electronically.
Don't Forget the Provinces: PST and QST
GST/HST is the federal layer, but four provinces run their own separate sales tax systems entirely outside it, each with its own threshold and its own registration portal:
- British Columbia (PST) — non-residents selling to BC customers generally must register once BC-sourced revenue exceeds CA$10,000 a year.
- Saskatchewan (PST) — no general small-seller exemption for corporations; most commercial sellers are expected to register regardless of volume.
- Manitoba (RST) — registration required once taxable Manitoba sales exceed CA$30,000.
- Quebec (QST) — registration required for anyone making taxable supplies in Quebec in the course of commercial activity, non-residents included, once they're considered to be carrying on business there.
These are calculated and filed completely separately from your federal GST/HST return, on their own provincial timelines, with their own portals. A seller who dutifully registers for GST/HST and stops there, assuming that's the whole Canadian sales-tax picture, is often still missing a BC or Manitoba filing obligation.
What Happens If You Ignore It
The typical failure mode isn't a dramatic enforcement action — it's a due-diligence review during a fundraise, an acquisition, or a routine CRA audit years later, at which point unpaid GST/HST plus interest plus late-filing penalties have compounded across every quarter of noncompliance. Late-filing penalties start at roughly 1% of the amount owing plus an additional 0.25% for each complete month the return is late, up to a maximum of 12 months, with interest compounding daily on top. For a seller who's been over the threshold for three years without registering, that math gets uncomfortable fast — and it's calculated retroactively back to when the obligation began, not from when you eventually notice it.
Why This Belongs in Your Books, Not Just Your To-Do List
The reason US sellers miss this isn't laziness — it's that GST/HST obligations don't show up anywhere in a standard US chart of accounts. If your books only track "Sales Tax Payable" as a single US-centric line, there's no natural place for a Canadian federal/provincial split to surface, and no trigger reminding you to check your worldwide revenue against a CA$30,000 line you've probably never heard of.
This is exactly the kind of cross-border complexity that benefits from transparent, auditable records instead of a black-box accounting tool. When your ledger is plain text, you can add a dedicated liability account for GST/HST collected, another for each province's PST/QST, and see at a glance — in version-controlled history — exactly when your worldwide revenue crossed a threshold and what you've collected and remitted since. That kind of clarity is much harder to get from a system that buries multi-jurisdiction tax liabilities inside a single generic "sales tax" bucket.
Keep Your Cross-Border Finances Organized from Day One
As you expand into Canadian sales, tracking GST/HST, provincial PST/QST, and input tax credits separately from your US books is essential to catching a registration obligation before the CRA does. Beancount.io provides plain-text accounting that gives you complete transparency and control over your financial data — no black boxes, no vendor lock-in. Get started for free and see why developers and finance professionals are switching to plain-text accounting.