Understanding Sales Taxes for Amazon Resellers in Canada

Amazon Reseller Tax Program

Sales taxes are charged on almost all products and services in Canada except for “necessities” such as food or medical supplies. Canada has both federal and provincial sales taxes and, as an international business selling to Canadians, you are required by law to collect and remit the taxes to the appropriate government authority.

The good news is six out of the ten Canadian provinces (Newfoundland, Nova Scotia, Prince Edward Island, New Brunswick, Ontario, and Alberta) have combined their sales taxes collection with the federal government meaning that one sales tax return covers multiple jurisdictions.

Unfortunately, the remaining four Canadian provinces (British Columbia, Saskatchewan, Manitoba and Quebec) collect their taxes separately. So, each of these provinces requires separate sales tax returns.

So in total, as an Amazon Reseller from the United States or elsewhere selling to Canadians, you’ll need to be registered for five sales tax numbers and file a minimum of five returns every year or more frequently.

How often you file your tax returns depends on your yearly sales volume. In most cases, one annual return will do. The federal return, which covers six provinces, only needs filing once a year if your sales are less than $1.5 million per year. In Manitoba however, a merchant with $75,000 in annual sales must file quarterly. In Saskatchewan, it’s $60,000.

Filing Your Sales Taxes in Canada

The deadline to file is usually due one month after the end of the reporting period. For example, if the tax return covers the period January 1st to December 31st, you must file and pay the taxes no later than January 31st of the next year. If sales taxes are filed quarterly your first return would be due April 30th.

Sales Tax Reporting Deadlines

KB Financial Solutions assists Amazon Resellers located in the United States of America and elsewhere with sales tax compliance in Canada. Our services for International Amazon Resellers include:

Registration of sales tax numbers in each Canadian jurisdiction required,

Online payment processing to the appropriate tax collection authorities.

Preparing and filing sales tax returns according to Canadian tax regulations

KB Financial Solutions staff have over 40 years combined experience in bookkeeping and tax preparation in Canada. Our Managing Partner, Brian McGill spent 15 years with the Canada Revenue Agency (CRA) as a tax auditor of business and personal taxes CRA is the equivalent of the IRS in the United States.