Migrate to Shopify Tax in Canada
Basic Tax provides automatic tax rate calculations based on your tax registrations in Canada. Your migration experience depends on whether you're currently charging sales tax to customers in Canada:
- If your store is in Canada, currently set up with Basic Tax, and is actively charging tax to customers, then your tax service is not changing automatically. You can opt in to Shopify Tax in the Shopify admin.
- If your store is in Canada and is currently set up with Basic Tax, but you're not actively charging tax to customers, then your tax service will be migrated to Shopify Tax automatically. You can opt out of Shopify Tax in the Shopify admin.
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Migrating to Shopify Tax in Canada
When you migrate to Shopify Tax, there are some changes to your pricing and how your store calculates taxes:
- Automatic tax rates based on product categories. Using product categories to calculate tax improves accuracy and reduces the need for tax overrides.
- Tax liability insights in Canada. Your sales and locations are automatically monitored to help you determine whether you need to register to collect tax in Canada or specific provinces.
- Pricing for Shopify Tax in Canada. Shopify Tax is free to use until August 15, 2026. After this, Shopify Tax is free until your global sales reaches $100,000 CAD. After meeting or exceeding this threshold, a fee applies to orders where tax is calculated by Shopify Tax.
To prepare for these changes, you should ensure that your products have product categories and review your existing tax overrides. To learn more, refer to Migrating from Basic Tax to Shopify Tax in Canada.
After your store is migrated to Shopify Tax, verify your tax settings by creating a draft order with a Canadian shipping address and reviewing the calculated taxes before processing orders for your customers.
Opting in to Shopify Tax in Canada
If you're currently charging sales tax in Canada and you want to change your tax service to Shopify Tax, then you can opt in to the migration.
Steps:
From your Shopify admin, go to Settings > Taxes and duties.
In the Tax regions section, click Canada.
In the Tax service section, click Manage.
Select Shopify Tax.
Click Save selection.
Opting out of Shopify Tax in Canada
If you're not currently charging sales tax in Canada and you don't want to change your tax service to Shopify Tax, then you can opt out of the migration and continue to use Basic Tax.
Steps:
From your Shopify admin, go to Settings > Taxes and duties.
In the Tax regions section, click Canada.
In the Tax service section, click Manage.
Select Basic Tax.
Click Save selection.