Whether you’re running a SaaS platform from California, selling eBooks through Shopify, or offering cloud-based services to clients in Nova Scotia, once your digital business crosses paths with Canadian consumers, you’re on the hook for GST/HST compliance in Canada.
With Canada’s sales tax laws now encompassing cross-border digital transactions, it’s essential to know when and how to register, collect, and remit GST/HST. This 2025 guide explains everything digital sellers must understand, from threshold rules to province-specific requirements.
What Counts as a Digital Product in Canada?
A digital product refers to any good or service delivered electronically. These are taxable under Canadian sales tax laws.
Examples include:
- eBooks, PDFs, and digital downloads
- Streaming content (video, music)
- Online courses and memberships
- SaaS, PaaS, and IaaS products
- Web hosting, domain services
- Online advertising services
- Paid access to exclusive communities or tools
If customers download it, stream it, or access it online, it likely qualifies as a taxable digital service or IPP (intangible personal property).
When Do You Need to Charge GST/HST on Digital Sales?
If you are a non-resident business earning over $30,000 in Canadian sales over 12 months, you must register, collect, and remit GST/HST.
This applies primarily to B2C sales:
- Subscription-based software (SaaS)
- Digital goods sold to individuals
- Music, eBooks, tools, or cloud services
For B2B transactions, if the buyer provides a valid GST/HST number, the reverse charge mechanism applies, and you do not collect tax.
What Is the $30,000 GST Registration Threshold?
The $30,000 threshold applies to gross taxable sales (not net income) across Canada. This threshold includes:
- All digital sales made to Canadian consumers
- Sales made through marketplaces or platforms
- Sales from any province (including zero-rated and exempt provinces)
Once you exceed $30,000 in any past or future rolling 12-month period, you are legally required to register and comply.
How to Register for GST/HST in Canada
Register via the CRA’s My Business Account portal. Foreign digital businesses can apply without a Canadian representative.
Once registered, you’ll receive:
- A GST/HST number (your business tax ID in Canada)
- Instructions on filing frequency (monthly, quarterly, or annually)
- Guidance on invoicing, reporting, and payment remittance
Foreign sellers may also need to register for:
Each province has its own threshold and rules for non-resident suppliers.
Canada’s Digital Tax Rates by Province (2025)
| Province | Tax Type | Rate |
|---|---|---|
| Alberta, BC, MB, SK, QC | GST + PST/QST/RST | 5% GST + Provincial Tax (varies) |
| Ontario | HST | 13% |
| Nova Scotia | HST | 15% |
| New Brunswick | HST | 15% |
| PEI | HST | 15% |
| Newfoundland & Labrador | HST | 15% |
| Territories (YT, NT, NU) | GST only | 5% |
Note: Some provinces like Quebec (QST 9.975%) and British Columbia (PST 7%) require separate registration for digital sellers.
Invoicing Requirements for Digital Sales in Canada
To remain compliant, your invoices to Canadian customers must include:
- Business name and address
- GST/HST registration number
- Invoice date and unique invoice number
- Description of the digital goods/services
- Applicable tax rate(s) and breakdown
- Total amount including tax
In Quebec, British Columbia, or Manitoba, you may also need to list your QST/PST/RST number.
Reverse Charge Rule for B2B Digital Sales
If you’re selling to a Canadian business that provides its GST/HST number, you don’t need to collect tax.
Instead, the buyer self-assesses the tax through the reverse-charge mechanism. Always validate their number through the CRA’s GST/HST Registry before excluding tax.
Filing and Remitting GST/HST as a Digital Seller
Filing frequency is typically quarterly for non-residents, unless your volume is high.
You’ll need to:
- File GST/HST returns (Form GST34-2 or online)
- Report sales by province
- Remit the tax collected
- Keep records for 6+ years
All filings are done online via CRA’s My Business Account portal.
Do You Need a Local Tax Representative?
No, Canada does not require non-resident businesses to appoint a local tax agent. However, working with a Canadian tax professional can simplify filings, especially if selling in multiple provinces.
FAQ’S
Yes, SaaS is subject to GST/HST and possibly PST/QST depending on the province.
If sales stay under CAD $30,000/year, you’re not required to register. But you can register voluntarily.
Yes. As of July 1, 2021, Google charges GST/HST unless a valid registration number is on file.
Yes. Quebec operates independently with a 9.975% QST on digital goods.
Yes, Canadian regulations recommend two pieces of evidence for determining customer location (billing address, IP, SIM, etc.).
Conclusion
With Canadian tax laws now extending to foreign sellers of digital products, understanding GST/HST compliance in Canada is more than just a good idea; it’s essential. Whether you’re selling digital downloads, SaaS subscriptions, or cloud services to Canadians, use this guide to register properly, charge the correct taxes, invoice clients accurately, and file returns on time.