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Most goods and services a Canadian business sells to customers outside Canada are zero-rated, which means you charge 0% GST/HST on them. You still register, still file returns, and you can still claim input tax credits on what you paid to make the sale. Selling $5,000 of goods to a buyer abroad, for example, means no $650 of Ontario HST on the invoice.
How does GST/HST apply to international sales?
The CRA’s rule is short: most goods and services you’d normally charge GST/HST on in Canada are zero-rated when they’re exported. Zero-rated isn’t the same as exempt. With a zero-rated sale, you’re still a registrant making a taxable sale, only at 0%, and that’s why the tax you paid on your own costs can come back as an input tax credit.
Exempt sales work the other way round. You’d charge nothing and get no credits. Mixing the two up is an expensive habit, so check which one your product falls under before you set up your invoices.
When are exported goods zero-rated?
For goods, the CRA’s memorandum describes three routes: the buyer exports the goods, you ship them outside Canada by carrier, or you send them by mail or courier to an address abroad. The conditions have to be met together. Partial compliance doesn’t count.
A supply of tangible personal property (other than an excisable good) made by a person to a recipient (other than a consumer) who intends to export the property is zero-rated if all of the following conditions are met
GST/HST Memorandum 4-5-2, Exports, Tangible Personal Property, Canada Revenue Agency, canada.ca
| Condition | What it means |
|---|---|
| Delivery | You ship the goods to a destination outside Canada, or hand them to a carrier for that trip |
| No use in Canada first | The buyer must not have taken the goods for use or supply in Canada before export |
| No processing | The goods aren’t changed in Canada after the sale, apart from what shipping reasonably needs |
| Timing | The buyer exports them as soon after delivery as is reasonable |
| Evidence | You hold proof that the goods left Canada |
The CRA lists acceptable proof: a bill of lading from the carrier, invoices from a customs broker or freight forwarder, import documents from the destination country, or other evidence the CRA accepts that the buyer didn’t generate. It’s your job to keep it. If you can’t show the goods left, expect to owe the tax.
Note the “other than a consumer” wording. The route where a buyer collects the goods and takes them out of the country is meant for business recipients who intend to export, not for an ordinary shopper who says they’ll take it home.
What about services and digital products?
The CRA says it’s the supplier’s responsibility to decide whether a service is zero-rated and to keep enough evidence to back that up. Services and intangible property such as licences have their own rules in the CRA memorandum, and they turn on who receives the service and where it’s used. Those rules don’t fit a simple table here, so read the memorandum for your case before you zero-rate anything that isn’t a physical shipment.
Digital products sold across the border have their own thresholds too. The current amounts for foreign sellers weren’t confirmed, so this page doesn’t cover them.
Do you need to register at all?
Maybe not. A small supplier is a business whose worldwide taxable sales, together with those of associated businesses, are $30,000 or less in a single calendar quarter and over the last four consecutive quarters. Zero-rated exports count toward that total, and that surprises people. A shop that ships mostly abroad can pass the limit without a single dollar of tax collected.
There’s a reason to register early anyway. If you buy inventory, packaging or software with GST/HST in the price, an input tax credit gets it back only when you’re a registrant.
A shipment worked through
An Ontario seller ships $5,000 of goods to a customer in another country. Sold to a buyer in Ontario, the GST and HST calculator shows $650 of HST and a $5,650 total. Exported with proper proof, the invoice reads $5,000 and the tax line is zero.
The seller isn’t better off by $650, though. That $650 was never the seller’s money. It was collected for the CRA. What the seller gains is a customer who isn’t paying 13% more. The seller still claims credits for the HST paid on rent, freight and supplies.
If you only know a gross amount, the reverse sales tax calculator pulls the tax back out. The profit margin calculator helps price the export sale when the tax line disappears.
Picture Mei in Kingston, who sells hand-poured candles online and ships a $5,000 wholesale order to a shop in Vermont. She books a courier, keeps the waybill and the delivery confirmation in the order folder, and marks the invoice zero-rated. When her return is due, the paper trail is already there, and she isn’t digging through email at tax time.
Mistakes that cost sellers money
The common error is zero-rating without paperwork. An invoice to a foreign address proves nothing about where the goods went. Another is letting a customer collect goods and use them in Canada before they leave, which breaks the pre-export condition.
Some sellers also charge tax “to be safe” and then can’t explain why. Charging tax you didn’t have to charge doesn’t help the buyer or you. And provinces differ. Quebec sellers deal with the QST as well, so look at the GST and QST calculator if that’s you.
Duties, import tax at the other end and foreign sales taxes are separate from all this and aren’t covered.
Where the numbers come from
The zero-rating rules, evidence list and small supplier limit come from Canada Revenue Agency publications on exports, tangible personal property, and small suppliers, read in September 2026. The $5,000 example is from this site’s calculators. This site isn’t linked to the CRA or any government, and these rules change, so check the current wording.
Frequently asked questions
Do I charge GST/HST on goods I sell to customers outside Canada?
Usually not. Most goods and services exported from Canada are zero-rated, so you charge 0% and can still claim input tax credits.
What proof do I need that goods were exported?
The CRA accepts a carrier's bill of lading, customs broker or freight forwarder invoices, or import papers from the destination country, among others.
Is zero-rated the same as exempt?
No. Zero-rated sales are taxable at 0% and you can claim input tax credits. Exempt sales give you no credits.
Do exports count toward the $30,000 small supplier limit?
Yes. The test uses worldwide taxable sales, and zero-rated supplies are taxable, so they count.
Can the buyer use the goods in Canada before exporting them?
No. If the buyer takes the goods for use or supply in Canada first, the zero-rating conditions aren't met.
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