Set up Canadian taxes in your Shopify store

Shopify Taxes Canada Flag

This brief guide will help you set up taxes in your Shopify store based in Canada.

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

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

Tax settings

To set up taxes, go to the Settings Taxes page in your Shopify store admin. 

If you are missing Canada in the Tax rates list of countries, you will need to add it as a shipping zone first. Visit the Settings → Shipping page, click Add shipping zone and add Canada

Once you have Canada included in your Tax rates list, you can set up the individual tax rates of each province.

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 Canada:

  1. Go to the SettingsTaxes page 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.

Shopify Tax Settings for Canada GST

A preview of tax settings for a Canadian Shopify store.

Zero-rated and tax-exempt goods

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 the Settings → Taxes page in your Shopify admin and click on Canada.
  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%.

Invoices

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.