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Basic Tax service in Canada

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Update your tax settings

If you're already using Shopify to sell in Canada, then you can update your store to use the new Canadian sales tax features. If your store is eligible to be updated, then a banner displays on the Taxes and duties page prompting you to update your tax settings.

Steps:

  1. From your Shopify admin, go to Settings > Taxes and duties.

  2. If a banner displays prompting you to update, then click Update tax settings.

  3. On the Canada page, click Collect sales tax, select the region that applies, and enter your registered tax number if you have one.

  4. Click Collect sales tax.

  5. Optional: To add additional sales tax regions, click Collect sales tax and select the provincial tax regions that apply.

Determine if you need to register for a tax number

Whether you need to register for a tax number depends on your business circumstances.

If your store is based in Canada, then generally you need to register for a GST/HST account if both of the following are true:

  • You sell or lease taxable products or services.
  • Your revenue from taxable sales in Canada is more than 30,000 CAD over the past four completed consecutive calendar quarters, or more than 30,000 CAD over the current calendar quarter.

If your store is not based in Canada, then generally you need to register for a GST/HST account if both of the following are true:

  • You sell taxable products or services to customers in Canada, and fulfill those orders from a warehouse located in Canada.
  • Your revenue from taxable sales in Canada is more than 30,000 CAD over the past twelve months.

If either of the preceding cases apply to you, then you might need to collect taxes on your sales, remit those taxes to the appropriate tax authority, and file regular reports with the tax authority. If your sales are lower than the threshold, then you don't need to register for a GST/HST account, and you don't need to collect or remit taxes.

If a province where you sell products and services charges a provincial sales tax (PST) separately from the goods and services tax (GST), then you might need to register in that province too.

If you're not sure whether you need to charge sales tax, then consult with a local tax accountant or other tax specialist, as well as with provincial and federal tax agencies.

Determine if you need to register at the provincial level

The provinces that charge a separate provincial tax are British Columbia, Manitoba, Quebec, and Saskatchewan. These requirements vary depending on the province. For more details, refer to Canadian taxes reference.

For example, you might need to register if you operate or advertise in those provinces.

Register and add your tax number

For GST/HST, you can register on the CRA (Canada Revenue Agency) website. If you need to register provincially, then you can do so on the specific provincial website. Refer to the list of registering with Canadian tax agencies.

After you've registered, add your tax registration number on the Taxes and duties page.

Steps:

  1. From your Shopify admin, go to Settings > Taxes and duties.

  2. In the Tax regions section, click Canada.

  3. Click Collect in new region, select the region that applies, and enter your registered tax number if you have one.

  4. Click Collect sales tax.

  5. Optional: To add additional sales tax regions, click Collect in new region and select the provincial tax regions that apply.

Override tax settings

You can override settings that apply to your store specifically, meaning only those that you've entered registration numbers for. For more information about how Canadian tax overrides are affected when you update, refer to Canadian tax override requirements.

Verify your tax settings with a draft order

Before processing live orders, you can verify that your tax settings are calculating correctly by creating a draft order. This allows you to test tax calculations without affecting real transactions.

Steps:

  1. From your Shopify admin, go to Orders > Drafts.

  2. Click Create order.

  3. Add a product to the order.

  4. Add a customer with a Canadian shipping address in a province where you've registered for tax collection.

  5. Review the Tax section to confirm the correct tax rates are applied.

  6. If the tax calculation looks correct, then you can delete the draft order. If the tax calculation is incorrect, then review your tax settings and registrations.

Troubleshoot common tax setting issues

If you're experiencing issues with your Canadian tax settings, then review the following common problems and solutions.

Troubleshoot tax settings not saving

If your tax settings aren't saving, then check the following possible causes:

Browser cache issues

  1. Try the same action in a different browser or incognito window.
  2. If it works there, then clear your browser cache and cookies, and try again.

Browser extensions interfering

  1. Deactivate browser extensions temporarily.
  2. Use a browser without extensions or an incognito window.

Network connectivity

  1. Check if other admin pages load correctly.
  2. Refresh the page or try on a different network connection.
Troubleshoot tax registration not displaying

If your tax registration isn't displaying after you add it, then check the following possible causes:

Invalid tax number format

  1. Compare your number against CRA format requirements.
  2. Enter your GST/HST number in the format: 123456789RT0001.

Wrong region selected

  1. Review the region dropdown selection.
  2. Select Canada for GST/HST or the specific province for PST/QST/RST.

Missing provincial registration

  1. Check if you've added provincial accounts for BC, MB, QC, or SK.
  2. Add separate registrations for each province where you need to collect provincial tax.
Troubleshoot incorrect tax rates

If your tax rates seem incorrect, then check the following possible causes:

Product categories not assigned

  1. Go to the Products page and check the Category field.
  2. Assign appropriate product categories to your products.

Tax overrides in place

  1. Go to Settings > Taxes and duties > Canada > Tax overrides.
  2. Review and remove any overrides that shouldn't apply.

Customer marked as tax-exempt

  1. Check the customer profile for tax exemption settings.
  2. Review tax exemption settings and remove if not applicable.

Products set to not charge tax

  1. Check the product's Pricing section for the Charge tax on this product setting.
  2. Activate the Charge tax on this product option if the product should be taxed.
Troubleshoot tax not being charged at checkout

If tax isn't being charged at checkout, then check the following possible causes:

No registration added for the region

  1. Review your tax settings.
  2. Add your GST/HST and provincial tax registrations.

Customer address not in a registered region

  1. Check the customer's shipping address province.
  2. If you're required to collect tax in that province, then add the appropriate registration.

Store set to "Not registered to charge"

  1. Check your Canada tax settings for this status.
  2. If you need to collect tax, then add your registration numbers.

Sell to customers in other regions

If you sell to customers outside Canada, then you might need to register for and collect VAT in those regions. The requirements vary based on where you're selling and the value of your orders.

Sell to customers in the United Kingdom

If you sell to customers in the United Kingdom, then you might need to register for UK VAT depending on the value of your sales. VAT requirements differ based on whether the order value is above or below £135 GBP.

For complete details about UK VAT requirements, EORI numbers, thresholds, and how to handle VAT and duties, refer to UK taxes reference.

Sell to customers in the European Union

When you ship orders to customers in EU member countries, import and duty rules apply based on order value. Orders equal to or less than €150 EUR are subject to VAT, while orders greater than €150 EUR are subject to import VAT and duties.

If you don't charge VAT and duties during checkout, then your customer pays them to the shipping carrier upon delivery. To collect VAT at checkout, you can register for the Import One-Stop Shop scheme (IOSS).

For complete details about EU VAT requirements, registration options, thresholds, and IOSS setup, refer to EU taxes reference.

Frequently asked questions

What's the difference between GST and HST?

GST (Goods and Services Tax) is a 5% federal tax that applies across Canada. HST (Harmonized Sales Tax) combines the federal GST with provincial sales tax into a single tax in participating provinces (Ontario, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island). If you're registered for GST, then you're automatically registered for HST. Learn more about Canadian taxes.

Why do I need separate provincial registrations?

British Columbia, Manitoba, Quebec, and Saskatchewan charge provincial sales tax separately from GST. If you sell to customers in these provinces and meet their registration thresholds, then you need to register with each province individually and collect their respective provincial taxes (PST, RST, or QST) in addition to GST.

Can I use my existing tax overrides after updating?

Yes, with some restrictions. Overrides only apply to regions where you've entered registration numbers. For detailed requirements, refer to Canadian tax override requirements.

How do I know if my tax rates are correct?

You can verify your tax rates by creating a draft order with products and a customer address in your registered regions. Compare the calculated tax rates against the current rates listed in Canadian taxes reference.

Why are my total tax amounts slightly different after updating?

After updating to the new tax features, tax amounts are rounded at the line-item level instead of the invoice level. This can result in small variances (usually a few cents) in total tax amounts. Learn more about tax rounding.

Get help with Canadian tax settings

For questions about Canadian taxes, the type of help you need determines who to contact.

Contact Shopify Support for help with:

  • How to add or change tax registrations in your Shopify admin
  • Technical issues with tax calculations or settings
  • Understanding how Shopify's tax features work
  • Troubleshooting error messages related to tax settings

Contact a tax professional or local tax authority for help with:

  • Whether you should register for GST/HST or provincial sales tax
  • Determining your tax obligations and compliance requirements
  • Questions about filing tax returns or remitting taxes
  • Understanding tax laws that apply to your specific situation

Prepare to contact Shopify Support about Canadian tax issues

Before reaching out to Shopify Support, gather the following information to help resolve your issue faster:

  • A description of what you expect to happen and what's happening instead
  • An admin link to an order showing the issue (go to Orders, click the order, and copy the URL from your browser)
  • If possible, an admin link to an order where taxes calculated correctly for comparison
  • Your GST/HST registration number and any provincial tax registration numbers (PST, QST, RST)
  • The customer's shipping address (province and postal code)
  • When the issue started occurring
  • Steps you've already tried from the troubleshooting section