As an American company shipping products to Amazon Canada warehouses, do we need to register for a Canadian Business Number?
Our sales volume in Canada is low and won’t likely pass $30K in revenue any time soon or maybe even ever. But we’ve seen conflicting information as to whether or not we need to register despite the low sales volume. Any advice is appreciated.
2 replies
Seller_X9AxWaXfNnGAl
If you were NOT using FBA, you would not need to register.
If you are using FBA, you will. You can not even legally import unless you have a Canadian registered business and also require the BN to be able to apply for the Import/Export number. You also must pay GST/HST for all imported products and also pay GST/HST to Amazon for all services they provide you.
The net effect is that until you do, you can not collect GST/HST from customers, but Amazon will collect for themselves, and you not claim the GST/HST you have paid. That means that you are paying at least 10% (depending on where you ship to) without recovering that from customers.
The $30K is a threshold where you MUST pay - even if you never collected any sales tax from customers. That would then mean that you would also owe sales tax for all of those prior sales.
The smart decision is to register up front, collect sales tax on your initial orders, claim your input tax credits and ultimately deal with Canadian income tax and include that tax paid on your US income tax filings (using the rules from the tax treaties).
You are better off to not even start trying to sell in Canada until you have dealt with the registration properly.
