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The simplified GST/HST system is a lighter registration for non-resident businesses that sell digital products or services to people in Canada. According to the CRA, your obligation to register generally depends on whether your threshold revenue goes over $30,000 CAD in any 12-month period. Once it does, you register and collect the tax on those Canadian sales.
Your obligation to register generally depends on whether your threshold amount of applicable revenues exceeds $30,000 CAD over any 12-month period.
GST/HST for digital-economy businesses, canada.ca
Do you have to register at all?
Probably, if you sell downloads, streaming, software as a service, subscriptions or similar digital supplies to Canadian consumers. The CRA counts revenue from those sales towards the $30,000 figure. It doesn’t count what you earn elsewhere in the world, and an office, staff or bank account in Canada makes no difference.
The test is a rolling one. You don’t wait for a calendar year to close. Every month you look back over the last twelve and ask whether the Canadian total is above the line, and the CRA tells you to keep recalculating it. Crossing it means you should register promptly, so don’t sit on it.
Imagine Mara, who runs a small language-learning app from Lisbon. Her Canadian subscriptions add up to about $2,600 a month. After a year that’s $31,200, so she’s over the line without any single month looking dramatic.
Platforms add a wrinkle. If your sales run through a distribution platform, the platform may carry the tax duty for those sales instead of you. Find out which of you is the responsible party before you register anything.
What does simplified registration change?
It swaps the normal rules for lighter ones. The CRA’s page on getting ready to register says simplified registrants pay on a quarterly basis and use a fiscal year ending 31 December. You can apply to calculate and pay your net tax in a qualifying foreign currency, and you don’t have to post the security deposit that non-residents normally put up.
The trade-off is one big limit. Simplified registrants can’t claim input tax credits. So if you pay Canadian GST/HST on an expense, you can’t recover it through this account.
| Item | What the CRA says |
|---|---|
| Threshold | More than $30,000 CAD of revenue in any 12-month period |
| Reporting | Quarterly, fiscal year ends 31 December |
| Input tax credits | Not allowed |
| Security deposit | Not required |
| Currency | A qualifying foreign currency is possible with authorization |
How much tax do you add to a sale?
The customer’s address decides, not yours. The rate follows the buyer’s province. A customer in Ontario pays 13% HST, and the tax on a $1,000 sale is $130, so the customer pays $1,130. You can check any province with the GST/HST calculator.
Quebec is the odd one. Sales to Quebec buyers carry GST plus QST, and QST is 9.975% according to Revenu Quebec. Run those through the GST and QST calculator. For a price that already includes tax, the reverse HST calculator backs the tax out.
BC, Saskatchewan and Manitoba have their own provincial sales taxes. Whether a digital seller must charge those is a separate question from GST/HST. We haven’t confirmed the current rules for each, so check the province’s own tax site.
Where do sellers go wrong with simplified GST/HST?
Three slips come up again and again. Sellers watch a calendar year when the test is any twelve months. They treat registering as something they can park until the next quarter. And they price in tax after the fact, then wonder why margins shrank.
Claiming input tax credits is another one. You can’t, so fold Canadian tax paid on your costs into your pricing instead. If you think a normal registration would suit you better, because you have real Canadian costs to claim back, that’s a question for the CRA or an accountant who does cross-border work. Simplified and regular registration follow different rules.
Keep records too. Canadian rules generally ask you to keep records for six years after the end of the last tax year they relate to. Customer location is the record that matters most here, since it sets the rate.
What should you do first?
Pull twelve months of sales and sort them by customer country. Add up the Canadian ones, in Canadian dollars. If the total is near $30,000, read the CRA’s digital-economy pages end to end before the next billing cycle. Then check how your checkout tool records where each buyer lives, because that single field drives every rate you charge afterwards.
Sources, and how we checked them
The $30,000 threshold, the quarterly reporting, the ban on input tax credits and the security deposit exemption come from the CRA‘s GST/HST pages for digital-economy businesses. The Ontario HST rate is from the CRA’s rate table, and the QST rate is from Revenu Quebec. We couldn’t confirm what a late or missing registration costs, so we haven’t quoted a penalty. The CRA page is the place to check that before you act. This site is independent and not affiliated with the CRA.
Frequently asked questions
What is the threshold for simplified GST/HST registration?
The CRA sets it at more than $30,000 CAD of relevant revenue in any 12-month period. You test it on a rolling basis, not by calendar year.
Can a simplified registrant claim input tax credits?
No. The CRA says simplified registrants aren't allowed to claim them, so price Canadian tax on your costs into your fees.
How often do simplified registrants file?
Quarterly, with a fiscal year that ends on 31 December, according to the CRA's registration page.
Do I need a Canadian bank account or office?
The CRA pages we read don't require one. You can ask to pay in a qualifying foreign currency.
Which tax rate do I charge a Quebec customer?
GST plus QST. Revenu Quebec sets QST at 9.975%.
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