5 February 2026
GST/HST Compliance for E‑Commerce Businesses: 2026 Guide
E-commerce businesses in Canada face unique GST/HST compliance challenges when selling across provinces and territories. The 2026 GST/HST compliance e-commerce Canada landscape requires understanding registration thresholds, place of supply rules, and provincial rate differences. Whether you're selling physical products, digital goods, or services online, proper compliance is essential to avoid penalties and ensure smooth operations.
Why E-Commerce Compliance Matters
E-commerce businesses selling across Canada must navigate complex GST/HST rules that differ from traditional retail. The 2026 GST/HST compliance e-commerce Canada requirements include determining your registration obligations, understanding place of supply rules for digital and physical goods, handling provincial rate differences, and maintaining proper records for CRA audits. Non-compliance can result in significant penalties, interest charges, and operational disruptions.
GST/HST Registration Thresholds for E-Commerce
Understanding when you must register for GST/HST is the first step in 2026 GST/HST compliance e-commerce Canada:
Registration Requirements
Mandatory Registration
If your worldwide taxable supplies exceed $30,000 in any four consecutive calendar quarters, you must register for GST/HST within 29 days of exceeding the threshold.
Voluntary Registration
You can register voluntarily even if under the threshold. This allows you to claim input tax credits (ITCs) on business expenses, which may be beneficial for e-commerce businesses with significant startup costs.
Non-Resident Sellers
Non-resident e-commerce businesses selling to Canadian customers may have different registration requirements. Digital services and goods sold to Canadians often require immediate registration regardless of sales volume.
Place of Supply Rules for E-Commerce
Determining the "place of supply" is crucial for 2026 GST/HST compliance e-commerce Canada, as it determines which tax rate applies:
Place of Supply Determination
Physical Goods
Rule: Place of supply is typically where the goods are delivered or made available to the customer.
- Ship to Ontario → HST at 13%
- Ship to BC → GST at 5%
- Ship to Alberta → GST at 5%
- Ship to Quebec → GST + QST
Digital Products & Services
Rule: Place of supply is typically the customer's location (billing address or IP address).
- Customer in Ontario → HST at 13%
- Customer in BC → GST at 5%
- Customer in Nova Scotia → HST at 15%
- Customer outside Canada → No GST/HST
Subscription Services
Rule: Place of supply is where the customer is located when the service is performed or where the service is primarily used.
- Monthly subscription → Rate based on customer location
- Annual subscription → Rate based on customer location
- Multi-province customers → May need to prorate
Provincial Tax Rates: 2026 Guide
Understanding provincial tax rates is essential for 2026 GST/HST compliance e-commerce Canada:
GST/HST Rates by Province (2026)
| Province/Territory | GST/HST Rate | Combined Rate | Notes |
|---|---|---|---|
| British Columbia | GST 5% | 5% | GST only |
| Alberta | GST 5% | 5% | GST only |
| Saskatchewan | GST 5% + PST 6% | 11% | Separate taxes |
| Manitoba | GST 5% + PST 7% | 12% | Separate taxes |
| Ontario | HST 13% | 13% | Harmonized |
| Quebec | GST 5% + QST 9.975% | 14.975% | Separate taxes |
| New Brunswick | HST 15% | 15% | Harmonized |
| Nova Scotia | HST 15% | 15% | Harmonized |
| Prince Edward Island | HST 15% | 15% | Harmonized |
| Newfoundland & Labrador | HST 15% | 15% | Harmonized |
| Northwest Territories | GST 5% | 5% | GST only |
| Nunavut | GST 5% | 5% | GST only |
| Yukon | GST 5% | 5% | GST only |
Note: For 2026 GST/HST compliance e-commerce Canada, businesses must charge the correct rate based on the customer's province. Quebec requires separate QST registration for businesses with significant Quebec sales. Saskatchewan and Manitoba require separate PST registration.
Special Rules for Digital Products and Services
Digital products and services have specific rules for 2026 GST/HST compliance e-commerce Canada:
Digital Product Compliance
Digital Products
Software, e-books, music, videos, and other digital downloads are taxable. Place of supply is the customer's location.
- Must collect tax based on customer province
- No tax on exports (sales outside Canada)
- Requires proper customer location verification
Online Services
SaaS, cloud services, consulting delivered online, and other digital services are taxable based on customer location.
- Subscription services taxed monthly/annually
- One-time services taxed at time of delivery
- B2B services may have different rules
Marketplace Sales
If selling through platforms like Amazon, Shopify, or Etsy, understand who collects tax.
- Some platforms collect tax on your behalf
- You're still responsible for remittance
- Verify platform tax collection policies
E-Commerce Compliance Checklist
Use this checklist to ensure proper 2026 GST/HST compliance e-commerce Canada:
Common E-Commerce Compliance Mistakes
Avoid these common mistakes in 2026 GST/HST compliance e-commerce Canada:
Charging Wrong Tax Rate
Charging 5% GST to all customers regardless of province. Ontario customers should pay 13% HST, Quebec customers need GST + QST.
Not Registering When Required
Failing to register after exceeding $30,000 threshold, or not understanding that international sales count toward the threshold.
Incorrect Place of Supply
Using business location instead of customer location for digital products, or not properly verifying customer location.
Poor Record Keeping
Not maintaining detailed records of sales by province, tax collected, and customer locations. Essential for CRA audits.
Preparing for CRA Audits
E-commerce businesses are increasingly subject to CRA audits. Proper preparation is essential for 2026 GST/HST compliance e-commerce Canada:
Audit Preparation Best Practices
Frequently Asked Questions
Yes, if your worldwide taxable supplies exceed $30,000 in any four consecutive calendar quarters, you must register for GST/HST regardless of whether you sell online, in-store, or both. The threshold includes all sales, including international sales and digital products. E-commerce businesses often reach this threshold quickly due to the scalability of online sales.
The tax rate depends on the customer's province. For physical goods, charge tax based on the delivery address. For digital products and services, charge tax based on the customer's location (billing address or IP address). Rates range from 5% (GST only provinces) to 15% (HST provinces) to 14.975% (Quebec with GST + QST). Your e-commerce platform should be configured to automatically charge the correct rate based on customer location.
If you have significant sales to Quebec customers (typically $30,000+ annually), you may need to register for QST separately. Quebec has its own tax administration (Revenu Québec) and requires separate registration. However, if your Quebec sales are minimal, you may be able to use simplified rules. Consult with a tax professional to determine your QST obligations based on your specific situation.
Sales to customers outside Canada are generally zero-rated (taxable at 0%), meaning you don't charge GST/HST. However, these sales still count toward your $30,000 registration threshold. For digital products and services, if the customer is located outside Canada, no GST/HST applies. Ensure your e-commerce platform is configured to identify international customers and not charge Canadian taxes.
Some platforms (like Shopify, Amazon, or Etsy) may collect GST/HST on your behalf, but you're still responsible for registration, filing returns, and remitting the tax to the CRA. The platform typically provides reports showing tax collected, which you use to file your returns. Verify that the platform is collecting correct rates and that you're properly registered. You remain liable for any errors or omissions.
Filing frequency depends on your annual sales. Businesses with annual sales under $1.5 million typically file annually. Those with $1.5-6 million file quarterly. Businesses over $6 million file monthly. The CRA assigns your filing frequency when you register. E-commerce businesses with rapid growth may need to request more frequent filing to manage cash flow, or may be automatically moved to more frequent filing as sales increase.
Get Expert Help with E-Commerce GST/HST Compliance
Navigating 2026 GST/HST compliance e-commerce Canada requirements can be complex, especially when selling across multiple provinces and dealing with digital products. J. Wang Chartered Professional Accountant offers GST/HST compliance services to help e-commerce businesses register correctly, configure tax collection systems, file returns accurately, and prepare for audits.
Schedule Your E-Commerce Compliance Consultation
Let's discuss your 2026 GST/HST compliance e-commerce Canada requirements and ensure your business is properly set up
Need help with other e-commerce matters? We also assist with GST/HST registration and filing, tax planning, and bookkeeping services. Schedule an appointment with our Vancouver accounting team today.
