Selling online to Canada from France: GST, customs and banking

If you ship your parcels from France, with no office, staff or stock in Canada, you usually don’t have to register for GSTGoods and Services TaxThe 5% federal sales tax, charged across Canada: the equivalent of French VAT, but added on top of the displayed price./HSTHarmonized Sales TaxA single tax that combines the GST and the provincial tax, used in Ontario and in the Atlantic provinces, among others., the Canadian tax that does the job of VAT. Your customer pays it on delivery, once the order is worth more than C$20. Two situations do require registration: digital products sold to consumers, and stock held in a Canadian warehouse, once those sales pass C$30,000 over 12 months.

What follows applies to French online shops (micro-entreprise, SARL, SAS) selling to consumers in Canada. If you invoice services to businesses, the guide to invoicing a Canadian client from France is the one you need; if you send pallets to a distributor, read the one on exporting and customs under CETA.

Do you need to register for GST/HST to sell online in Canada?

No, as long as you ship from France and aren’t carrying on business in Canada. The Canada Revenue Agency (CRACanada Revenue AgencyThe federal tax authority, the equivalent of France’s Direction générale des Finances publiques.), the counterpart of France’s DGFiP, only requires non-residents to register under the normal regime if they actually operate in Canada: employees or agents, an office, contracts signed there. A shop shipping from Nantes doesn’t. The rule that a business must register once its worldwide sales pass C$30,000, explained in the guide to GST, HST and QST for a French business, applies to businesses carrying on business in Canada, not to it.

Since July 1, 2021, digital products and services sold to consumers have been the exception: online courses, subscriptions, e-books, software, downloadable sewing patterns. Once you pass C$30,000 of sales to Canadian consumers over 12 monthsSource: CRA, not counting sales outside Canada, you must register under the CRA’s simplified regime and charge the GSTGoods and Services TaxThe 5% federal sales tax, charged across Canada: the equivalent of French VAT, but added on top of the displayed price. or HSTHarmonized Sales TaxA single tax that combines the GST and the provincial tax, used in Ontario and in the Atlantic provinces, among others. of the buyer’s province. As with the EU’s One-Stop Shop, you register and file online from France, but you can’t recover the tax you pay on your own expenses. Sales made through a registered marketplace or app store don’t count, because the platform collects the tax.

The other exception is goods held in Canada. If you send your stock to a fulfilment warehouse in Toronto or Montreal, you must register under the normal regime once your sales to unregistered buyers pass C$30,000 over 12 monthsSource: CRA, unless you sell only through a registered marketplace, which then collects the tax for you. The CRA sums up these rules in its e-commerce FAQ.

QST, PST: what are the rules in the provinces?

Five provinces, including Ontario (the province Toronto is in), have merged their tax with the 5% federal GSTGoods and Services TaxThe 5% federal sales tax, charged across Canada: the equivalent of French VAT, but added on top of the displayed price. into a single HSTHarmonized Sales TaxA single tax that combines the GST and the provincial tax, used in Ontario and in the Atlantic provinces, among others., run by the CRACanada Revenue AgencyThe federal tax authority, the equivalent of France’s Direction générale des Finances publiques.. Four others keep a separate tax with their own rules for online sellers, and a CRA registration doesn’t cover you there: Revenu Québec and the provincial finance ministries are separate administrations.

In Quebec, the 9.975% QSTQuebec Sales TaxQuebec’s provincial sales tax, at 9.975%, charged on top of the GST. follows much the same logic as the federal rules: a foreign supplier selling digital services or products to Quebec consumers must register under the specified system (Revenu Québec’s simplified registration)Source: Revenu Québec above C$30,000 over 12 months. If your stock sits in a Canadian warehouse, Revenu Québec may require you to register too, even if the warehouse is in Ontario: check before you ship your stock there.

Outside Quebec, three provinces have a separate provincial sales tax (PSTProvincial Sales TaxA sales tax specific to some provinces, such as British Columbia, charged on top of the GST.), and Alberta has none. If you ship from France, each one has its own rule:

• British Columbia (Vancouver), 7% PST: no registration for goods shipped from abroad unless you hold stock in the province; for software and digital services, registration is mandatory above C$10,000 of annual revenue in the provinceSource: BC Gov.
• Manitoba (Winnipeg), 7% PST: a marketplace collects it on every sale, even for a parcel shipped from abroad, and you have nothing to do; if you market directly to Manitoba customers yourself, you must register.
• Saskatchewan (Regina), 6% PST: if you don’t collect it, the buyer has to report and pay it.
• Alberta (Calgary, Edmonton) has no provincial sales tax, just the 5% GST.

Once GST is added, the total tax your customer pays triples from one end of the country to the other, from 5% in Alberta to 15% in New Brunswick.

How much does your customer pay on delivery?

As long as you ship from France, it all happens at the border. The Canada Border Services Agency (CBSACanada Border Services AgencyCanadian customs: it checks travellers and goods on arrival., the counterpart of French customs) charges no duties or taxes below C$20 in valueSource: CBSA, by post or by express carrier. Above that, it collects the GSTGoods and Services TaxThe 5% federal sales tax, charged across Canada: the equivalent of French VAT, but added on top of the displayed price. or HSTHarmonized Sales TaxA single tax that combines the GST and the provincial tax, used in Ontario and in the Atlantic provinces, among others. of the customer’s province, plus any customs duties, on the full value of the shipment, and splitting an order into several parcels to stay under C$20 isn’t allowed.

You’ll often read on forums that parcels are exempt up to C$40 or C$150. Those thresholds exist, but only for parcels shipped from the United States or Mexico by courier, under the Canada–United States–Mexico Agreement (CUSMA). A parcel sent from France stays at the C$20 threshold, which gives American competitors an edge on small baskets.

As for customs duties, the agreement between the European Union and Canada (CETA) removes them on most goods of EU origin, provided your invoice carries the origin declaration. The guide to exporting under CETA gives the exact wording. That leaves the carrier’s fees: C$9.95 per taxable parcel with Canada PostSource: Canada Post, and brokerage fees that are often higher with express carriers.

How should you show prices to Canadian customers?

Canadian customers expect prices in Canadian dollars, before tax, with their province’s tax added at checkout. A price in euros puts them off twice over: they have to convert it, then wonder whether they’ll pay tax again on delivery.

If you aren’t registered, show your prices in dollars and say right under the price that any duties and taxes are payable on delivery. If you are, for digital products or stock in Canada, work out the tax from the delivery address: 5% in Alberta, 13% in Ontario, 14.975% in Quebec.

Do you need a Canadian bank account to get paid in dollars?

No. You can show your prices in Canadian dollars and let your payment provider or marketplace convert the money and pay it into your French account in euros. To keep dollars and choose when to convert, a multi-currency account opened from France is enough; some even provide Canadian bank details for receiving local payments.

The real cost hides in the conversion: the exchange margin comes on top of the payment fee, and it’s rarely shown up front. Compare the rate you get with the one the Bank of Canada publishes every day: the gap is what you’re really paying. And if you have costs in Canada (advertising, contractors, a warehouse), pay them from your dollar balance so you don’t convert twice.

One detail often surprises French sellers: Canada doesn’t use IBANs. An account is identified by an institution number (3 digits), a transit number for the branch (5 digits) and the account number. Canadians mostly pay by credit card online, and by Interac e-Transfer between individuals, a service limited to Canadian accounts.

A non-resident can open a real business account with a Canadian bank, but it’s rarely simple. In practice the big banks ask for an entity registered in Canada (provincial registration or a Canadian company), ID for the directors and often an in-branch appointment. That account becomes useful once you have stock, staff or suppliers to pay locally, in other words when you set up a subsidiary or branch in Canada.

Example: a shop selling C$65,000 a year in Canada

Take an online shop in Lyon (a made-up example) selling household linen made in France. Assumptions: 40 orders a month at C$136 on average, about C$65,000 a year, all shipped from Lyon, customers mostly in Ontario and Quebec, no stock or staff in Canada, euro at C$1.60.

On tax, it doesn’t have to register for GSTGoods and Services TaxThe 5% federal sales tax, charged across Canada: the equivalent of French VAT, but added on top of the displayed price./HSTHarmonized Sales TaxA single tax that combines the GST and the provincial tax, used in Ontario and in the Atlantic provinces, among others. or QSTQuebec Sales TaxQuebec’s provincial sales tax, at 9.975%, charged on top of the GST., even though it’s well past C$30,000: it isn’t carrying on business in Canada, and it sells neither digital products nor stock held in Canada. Its customers pay the tax on delivery. In France, these sales are VAT-exempt exports, as long as the shop keeps proof the goods left the EU.

On currency, if its payment provider converts each sale with a 2% margin (a common figure for automatic conversion), it loses C$1,300 a year, about €810. If it keeps the dollars in a multi-currency account and converts once a month with a 0.5% margin (another assumption), the loss drops to around C$325, about €200. On online-retail margins, €600 a year is real money.

The day it sends its stock to a fulfilment warehouse in Toronto to offer two-day delivery, the rules change: with C$65,000 of sales, it must register for GST/HST under the normal regime, check what it owes Revenu Québec for its Quebec customers, and charge tax on every order. In return, its customers no longer pay anything at the door, and it gets back the GST paid when importing its stock.

Where to start, and in what order?

If all your parcels leave from France and you sell nothing digital, you can skip the step about tracking the C$30,000 threshold; the others still apply.

If your project goes beyond a shop (a warehouse, hiring, a company on the ground), the Canada market entry checklist takes you through the steps in order.