No matter where your online business is based — if you have customers in Canada, you must follow Canadian GST/HST rules. This 2026 guide covers the federal tax that applies to digital sales across the country.
Please note that several Canadian provinces also have their own separate sales tax. If your customers are in those provinces, you may have additional obligations:
Digital products
A digital product is any product that's stored, delivered, and used in an electronic format — received by the customer via email, download, or by logging into a website.
Common examples include:
- E-books, images, movies, and videos — whether purchased or streamed (e.g. Netflix)
- Downloadable and streaming music — individual files or streaming services like Spotify
- Cloud-based software and as-a-Service products — SaaS, PaaS, and IaaS
- Websites, hosting services, and internet service providers
- Online advertising and affiliate marketing
You may also see digital goods referred to as "digital services," "e-goods," or "e-services" — all of these refer to the same thing. Not sure if what you sell qualifies? Check our explanation of what a digital product is.
Canada's GST/HST for digital products
GST/HST is the federal consumption tax that applies to most goods and services sold in Canada. There are two ways it applies depending on the province:
1. The Harmonized Sales Tax (HST)
Five provinces combine the federal GST and their provincial tax into one — the Harmonized Sales Tax (HST). If you sell to customers in these provinces, you charge a single combined rate and remit it through the same federal registration.
2. The separate provincial tax (PST/QST/RST)
Several other provinces have their own sales tax that applies in addition to the federal GST — called PST (British Columbia, Saskatchewan), QST (Québec), or RST (Manitoba). These are separate taxes with separate registration and filing processes. This guide covers only the federal GST/HST.
For province-specific guidance, see:
Registering for Canada's GST/HST
Is there a registration threshold?
Yes. Canada has an annual registration threshold of $30,000 CAD for remote sellers.
The threshold applies to your total sales to Canadian customers during any 12-month rolling period — looking back at the past 12 months, or projecting forward over the next 12. Once your sales exceed $30,000 CAD in any such period, you must register for GST/HST before making further taxable sales.
If your Canadian sales remain below $30,000 CAD, you are not required to register. However, you may register voluntarily if you choose.
Simplified vs. normal registration
Canada offers two registration paths for non-resident digital businesses:
Simplified registration is designed for businesses that sell digital services directly to Canadian consumers (B2C) without a significant physical presence in Canada. Under simplified registration, you collect and remit GST/HST but cannot claim input tax credits (ITCs) on your Canadian business expenses.
Normal registration is required if your business is "carrying on business" in Canada — for example, if you have Canadian employees, a warehouse, or other physical presence. Normal registrants can claim ITCs.
Most foreign digital businesses that simply sell to Canadian consumers will qualify for simplified registration.
The registration process
Follow our Canada GST/HST Registration Guide for step-by-step instructions. Once registered, you will receive a GST/HST registration number — a 15-character Business Number ending in RT0001 — which you include on invoices to Canadian customers.
Do you need a local tax representative?
No. The Canada Revenue Agency does not require non-resident businesses to appoint a Canadian representative. You can register, manage your account, and file returns entirely online through CRA portals.
Collecting GST/HST in Canada
Once registered, charge the correct rate on every taxable sale to a Canadian resident.
B2B sales: If your customer is a Canadian business and provides a valid GST/HST registration number, you do not need to collect tax — the buyer accounts for it via Canada's reverse-charge mechanism.
B2C sales: Charge the applicable rate based on the customer's province or territory:
| Province / Territory | Rate | Type |
|---|---|---|
| Ontario | 13% | HST |
| Nova Scotia | 14% | HST |
| New Brunswick | 15% | HST |
| Newfoundland and Labrador | 15% | HST |
| Prince Edward Island | 15% | HST |
| Alberta, Northwest Territories, Nunavut, Yukon | 5% | GST only |
| British Columbia, Manitoba, Quebec, Saskatchewan | 5% | GST only (+ separate PST/QST) |
Want to check your obligations? Try our free GST Calculator.
GST/HST invoices in Canada
To comply with Canadian tax law, your invoices to Canadian customers must include:
- Your business name and address
- Your GST/HST registration number
- Invoice date
- Invoice sequence number
- Description of the goods or services
- GST/HST rate applied to each item
- Total amount after tax
Note: In provinces where a separate PST or QST applies, you may also need to include your PST or QST number.
Quaderno generates compliant invoices automatically and stores them in the cloud.
Filing GST/HST returns in Canada
Charging and collecting tax is only the first half of staying compliant. You also need to file returns and remit whatever you owe to the CRA.
Most non-resident businesses file quarterly and must file and pay within one month of the end of each reporting period. You must file a return for every period — even if you collected no GST/HST, a nil return is required.
For step-by-step filing and payment instructions, see the Canada GST/HST Filing Guide.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the tax authorities.