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Bookkeeping for a Canadian business with US customers comes down to three things: record every US sale in Canadian dollars, keep proof of where the customer is, and decide how you’ll treat GST/HST. Many services sold to unregistered non-residents can be zero-rated, so you charge 0% instead of 13% in Ontario. On a $5,000 job, that’s the difference between billing $5,000 and billing $5,650.
Do you charge GST/HST to a US customer?
Often not, though the answer turns on what you sell and to whom. The CRA says you don’t charge GST/HST on services you perform totally outside Canada. Certain advisory, professional and consulting services to an unregistered non-resident can be zero-rated too, and so can some services delivered by electronic means. Exported goods can also be zero-rated when the conditions on shipping and delivery are met.
A supply of a service made to a non-resident person is zero-rated under the general provision provided the supply is not specifically excluded
GST/HST Memorandum 4-5-3, Exports, Services and Intangible Personal Property, Canada Revenue Agency, canada.ca
What if the customer is registered for GST/HST, or has an office in Canada, or you deliver in Canada? Then the answer can change. Every case can’t be covered here, so check the type of supply on the CRA’s pages for your exact service.
Zero-rated isn’t the same as exempt. You still report the sale on your GST/HST return, on the zero-rated line, and you keep claiming credits on your costs. The GST/HST calculator shows what an Ontario sale carries: $650 of HST on $5,000, for $5,650 in total. The US customer’s version is $5,000.
Which proof should you keep?
The CRA expects you to hold satisfactory evidence of the customer’s residency and registration status. That means a signed statement, a business address outside Canada, a contract, or the shipping records for goods. The CRA says it will accept other documents as well, and that the proof should be in place on the date of the supply.
Put it in the customer file when you first invoice them, not when someone asks. It takes two minutes, and it’s what saves the zero rating in an audit.
A simple routine for each new US client works well:
- Record the legal name and the business address outside Canada.
- Ask whether they’re registered for GST/HST, and keep their answer in writing.
- Save the signed contract or statement of work.
- Note the currency and where you’ll take the exchange rate from.
- Mark the invoice as zero-rated, with the reason, so the return matches the file.
Take Ruth, a web developer in Moncton, who lands a client in Maine. The five steps take her about ten minutes, and that folder is what she’d hand over if the CRA ever asked why no HST was charged.
How do you convert US dollars?
For income tax, the CRA says to use the Bank of Canada rate on the day the amount arises. An average rate over a period is also acceptable for practical reasons, if you use it the same way each time. For GST/HST, you can use the rate on the day tax is payable, the day you’re paid, the day you got the currency, or a monthly average.
| Purpose | Rate the CRA accepts |
|---|---|
| Income tax, business income | Bank of Canada rate on the day the amount arises, or an average rate used consistently |
| GST/HST, day options | Day tax is payable, day paid, or day the currency was acquired |
| GST/HST, average option | Monthly average rate |
| Rate sources for GST/HST | Your bank, a chartered bank or the Bank of Canada |
| Consistency | Pick one method and use it, typically for a year |
Pick one approach and write it down, with the date you chose it and the source of the rates, so that whoever prepares your return next year uses the same one. Changing every month makes your books impossible to check.
What does an exchange gain or loss look like?
Say you invoice US$5,000 when the rate is 1.38, so you record C$6,900 of income. Thirty days later the customer pays and your bank credits you at 1.35, which is C$6,750. You’ve lost C$150, about 2.2% of the invoice. (These rates are examples, not real quotes.)
Book the income at C$6,900 on the invoice day, then a C$150 exchange loss when the money arrives. The Income Tax Act doesn’t say whether such a gain or loss is income or capital, so a large or unusual one, like a US dollar loan, is worth an accountant’s look.
Fees from your bank or payment platform belong in your books too. The CRA says currency conversion premiums have to be counted in the amount, so record the money that actually landed.
How do US sales change your tax planning?
Income is income, wherever the customer lives. Once your US invoices are in Canadian dollars, they add up with your other revenue. If your net business income is $80,000 in Ontario, the self-employed tax calculator shows $22,126.47 of income tax and CPP. The calculator leaves out GST/HST, EI and business costs.
A US dollar bank account helps, because you can keep US receipts and US costs together without converting each time. Each transaction still gets a Canadian dollar value on its own date.
And the US side? What any state or the IRS may ask of a Canadian seller, such as state sales tax or tax forms a customer may request, isn’t covered on this page. Read the customer’s request, check the state’s or the IRS’s own site, and don’t assume it’s the same as Canada.
What mistakes come up?
Charging HST to a US customer when the service was zero-rated, then having to fix invoices. Skipping the zero-rated line on the return. Booking a US$ deposit at the wrong day’s rate. Mixing US and Canadian dollars in one column of the spreadsheet. And not keeping proof, which is the one that costs money. Records must be kept six years from the end of the last tax year they relate to. Use the tax instalments calculator if your net tax owing, in Canadian dollars, is over $3,000.
One more, and it’s a quiet one: letting a deposit sit in the US account without recording it. At tax time, those few unlogged transfers are the first thing that makes the sales total not match the bank.
How we checked the figures
The export and zero-rating rules, the currency conversion rules and the six-year record period come from Canada Revenue Agency pages, including its GST/HST on imports and exports page, read in September 2026. The exchange rates in the example are made up to show the arithmetic. No level of government runs or endorses this site.
Frequently asked questions
Do I charge GST/HST to customers in the US?
Often not. The CRA says services performed totally outside Canada aren't charged, and certain services to unregistered non-residents can be zero-rated. Check the type of supply for your service.
What exchange rate do I use for income tax?
The Bank of Canada rate on the day the amount arises, per the CRA. An average rate can be accepted if you use it consistently.
What proof of residency should I keep?
Satisfactory evidence of where the customer is and whether they're registered, such as a signed statement or contract. Keep it on file from the first invoice.
Is a zero-rated sale reported on my return?
Yes. It's a taxable supply at 0%, so it appears on the return and you can still claim credits on related costs.
Do I need to collect US sales tax?
We couldn't confirm US state rules. Check the state's own site for your situation.