Key points
A French business only has to register for GST/HST if it carries on business in Canada (employees or agents, an office, contracts signed there). If it does, it must register once its worldwide sales pass C$30,000, so an SME almost always has to. With no presence in Canada, registration is only required for digital products sold to consumers or stock held in Canada, above C$30,000 of Canadian sales over 12 months.
- GST/HST registration only applies to businesses carrying on business in Canada: they must register once their worldwide sales pass C$30,000.
- With no presence in Canada, two situations require registration: digital products sold to consumers and stock held in Canada, above C$30,000 of Canadian sales over 12 months.
- Registration is free (form RC1 or online), but a non-resident with no permanent establishment usually pays a security deposit of at least C$5,000.
- The rate depends on the customer’s province: from 5% in Alberta to 15% in New Brunswick, and 14.975% in Quebec with the QST.
- QST is filed with Revenu Québec; a supplier outside Quebec selling digital products or services to Quebec consumers registers above C$30,000 over 12 months.
A French business only has to register for GST/HST, Canada’s equivalent of VAT, if it’s carrying on business in Canada. If it is, it must register once its worldwide sales pass C$30,000, so an SME almost always has to. If you sell from France with no presence in Canada, you usually have nothing to do, with two exceptions: digital products sold to consumers, and stock held in a Canadian warehouse, once you pass C$30,000 of Canadian sales over 12 months.
Carrying on business in Canada means actually operating there, not just having customers there. The Canada Revenue Agency (CRA) looks at each case on its facts, but mostly at where your employees or agents work, where contracts are signed, where the work is done, and whether you have an office or a bank account in Canada. A consultant in Lyon working for a client in Montreal, or an online shop shipping from Nantes, usually isn’t carrying on business in Canada. A company that puts a sales rep in Toronto to sign contracts is, even without an office.
What follows applies to businesses established in France (companies, sole traders, micro-entrepreneurs) that sell to Canadian customers. For the invoice itself, with French VAT and the required wording, see the guide to invoicing a Canadian client from France; for an online shop, the guide to selling online in Canada.
The VAT equivalent: GST/HST
It works like VAT: you charge tax to your customers, deduct the tax you paid on your purchases (“input tax credits”, the equivalent of deductible VAT) and send the difference to the CRA. The federal GST is 5%; five provinces have merged it with their own tax into a single HST, and Quebec charges its own tax on top of it, the QST.
Two things work differently from VAT. First, there’s no single national rate: it depends on your customer’s province, from 5% in Alberta to 15% in New Brunswick. Second, Canadian prices are shown before tax: the tax is added on the invoice, and your Canadian customers expect that.
Do you need to register? The C$30,000 threshold
If you’re carrying on business in Canada, you stay a “small supplier”, which means you don’t have to register, as long as your taxable sales don’t go over C$30,000 in a calendar quarter or over the last four quarters. For a non-resident business, the CRA counts sales worldwide, including those of associated companies, not just sales in Canada.
Take a Lyon SME (a made-up example) with €800,000 in revenue that sells C$10,000 worth in Canada through a sales rep based in Toronto who signs the contracts. Its Canadian sales are small, but its worldwide revenue is far above the threshold, so it has to register. If it sold from Lyon with nobody in Canada, it wouldn’t have to do anything.
You can lose small supplier status in two ways:
- Over the threshold in a single quarter: you lose small supplier status right away and charge tax from the sale that takes you over.
- Over the threshold across four quarters: your status ends at the end of the month after that quarter.
You can also register before you reach the threshold: voluntary registration lets you recover the tax you pay on Canadian purchases.
If you aren’t carrying on business in Canada, the threshold doesn’t apply to you: your customers pay the tax at the border on goods you ship them, and you don’t charge GST on services you provide from France. Two situations still require you to register, and then only your Canadian sales count.
How to register for GST/HST from France
You register with the CRA’s non-resident tax centre. It’s free, but a business with no permanent establishment in Canada usually has to pay a security deposit.
- Get a business number (BN) and a GST/HST account, through the CRA’s online form or with form RC1, sent to the non-resident tax centre. The BN does the job of your SIREN number for everything you do with the CRA.
- Budget for the security deposit if you have no permanent establishment in Canada: 50% of your estimated net tax for the first 12 months, with a minimum of C$5,000 and a maximum of C$1 million. You don’t need one if your sales in Canada stay under C$100,000 a year and your net tax is somewhere between C$3,000 owing and a C$3,000 refund.
- Charge tax from the sale that takes you over the threshold, with your GST/HST number on every invoice.
- Register separately for QST with Revenu Québec, and for PST in British Columbia, Saskatchewan or Manitoba if your sales require it: your CRA registration doesn’t cover those provincial taxes.
The full rules for non-residents, deposit included, are in the CRA’s guide RC4027.
Which rate do you charge a Canadian customer?
It’s the province where your customer is, or where the goods are delivered, that sets the rate, not where you ship from. The same order is taxed at 5% in Calgary and 14% in Halifax.
| Customer located in | Tax charged | Total rate |
|---|---|---|
| Alberta, territories | GST only | 5% |
| British Columbia, Saskatchewan, Manitoba | GST (+ provincial PST, filed separately) | 5% GST, plus 6–7% PST |
| Ontario | HST | 13% |
| Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island | HST | 14–15% |
| Quebec | GST + QST | 5% + 9.975% = 14.975% |
PST in British Columbia, Saskatchewan and Manitoba doesn’t go through the CRA: each province has its own registration rules. For a specific address, the CRA’s official calculator gives you the right rate.
On an invoice, a C$10,000 job before tax for a client in Toronto carries C$1,300 of HST at 13%, so the client pays C$11,300. For a client in Calgary, the same job carries C$500 of GST, for C$10,500 in total. A business client gets that tax back through its own input tax credits, the way a French company deducts VAT, as long as your GST/HST number is on the invoice.
Selling in Quebec: the QST
In Quebec, the QST (9.975%) is run by Revenu Québec, which also handles the GST for businesses based in Quebec. A supplier based outside Quebec, whether in France or elsewhere in Canada, that sells services or digital products to Quebec consumers must register under the QST’s simplified system once those sales pass C$30,000 over 12 months.
Sales made through a platform that’s already registered for QST (a marketplace, for example) don’t count toward that threshold, because the platform collects the tax. Once you’re registered, you get a QST number containing the letters NR.
If you set up a subsidiary, it registers like any other Canadian business and also pays corporate income tax, which the guide to setting up a company in Canada covers. To work out whether you’re carrying on business in Canada and what to register for first, go through the Canada market entry checklist.
