Set up Canadian taxes in your Shopify store

Firstly, it is important to note that you are obliged to register and charge GST/HST to your Canadian customers if your revenue is above CAD $30,000 over four consecutive quarters. 

The tax you charge depends on the billing address of the customer who’s making an order, not the place of your business.

To set-up taxes, for Canada:

1. Go to Settings → Taxes in your Shopify admin. You should set tax rates for all Canadian provinces you are shipping to.
2. If you do not see Canada in the Tax rates list, you will need to add it as a shipping zone first. Go to Settings → Shipping→ Shipping profiles and click Create new profile.
   
3. Click Create Shipping zone and select Canada. 

Canada’s federal country tax is GST. Each province and territory has a different tax system—a participating province charges HST (instead of federal tax), and a non-participating province charges GST + PST (added to federal tax).

To set up tax rates for Canadian provinces:

1. Go to Settings → Taxes in your Shopify admin and click on Canada.
   
2. Enter the current 5% GST rate in the Country Tax field.
   
3. For each province, enter the current provincial/harmonized (PST/HST) tax rate.
   • When using HST, choose instead of 5% federal tax from the drop-down.
   • When using PST, choose added to 5% federal tax from the drop-down.
4. Leave provinces with no PST with 0% tax and choose added to 5% federal tax from the drop-down.
   

If you are selling zero-rated or tax-exempt goods (goods for which no tax is charged), you will need to set up tax overrides.

To set up tax overrides in Shopify:

1. Go to Settings → Taxes in your Shopify admin and by Canadaclick Edit.
2. Scroll down to Tax overrides.
3. Add a collection of products from your store that are subject to zero-rate and tax-exempt rules and set their Tax Rate to 0%.

Sufio invoices are compliant with account legislation in Canada. They also serve as valid documentation for both GST/HST taxed and GST/HST-free orders exported in and out of Canada.

Issuing invoices with a correct tax breakdown is vitally important for your bookkeeping and tax purposes.

If you are selling to businesses (B2B), Sufio invoices display all the required information including your GST number and the GST number of your customers.