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GST/HST for digital economy businesses

Cross-border digital products and services threshold amounts

As of July 1, 2021, your business may need to register for the GST/HST. Your obligation to register generally depends on whether your threshold amount of applicable revenues exceeds $30,000 CAD over any 12-month period beginning on or after that date.

This applies to non-resident vendors who:

  • are not registered for the GST/HST under the normal GST/HST regime and not carrying on business in Canada, and
  • sell taxable digital products or services, such as online music streaming or traditional services, to Canadian consumers and other Canadian entities who are not registered under the normal GST/HST regime

It also applies to non-resident distribution platform operators who are not registered for the GST/HST under the normal GST/HST regime and not carrying on business in Canada, and who make or facilitate such supplies through their platform.

Calculating your threshold amount

Your obligation to register generally depends on whether your threshold amount of applicable revenues exceeds $30,000 CAD over any 12-month period beginning on or after July 1, 2021.

Your threshold amount is equal to the total of all your revenues for a period that are, or could reasonably expected to be, from:

If your threshold amount is more than $30,000 CAD, on July 1, 2021, you are required to be registered for the GST/HST under this measure on that date, and to apply for registration by that date.

If your threshold amount is $30,000 CAD or less on July 1, 2021, you are not required to be registered for the GST/HST on that date under this measure. Make sure to regularly recalculate your threshold amount to determine whether it is more than $30,000 CAD in a 12-month period. If it is, you may have to register for the GST/HST.

If your distribution platform is registered for the GST/HST

If you are a specified non-resident supplier who makes taxable supplies of digital products or services to specified Canadian recipients through a non-resident distribution platform that has registered for the GST/HST, those supplies are not included in the calculation of your threshold amount. They are instead included in the calculation of the threshold amount of the distribution platform operator.

If these are the only such supplies that you make as a non-resident vendor, you do not have to register for the GST/HST under this measure.

Examples

Example 1 - Registration threshold amount of specified non-resident supplier exceeded on July 1, 2021

A non-resident vendor who is not registered for the GST/HST makes specified supplies of online subscription-based video streaming directly to customers around the world, including Canadian consumers. The total revenues of the vendor from these supplies (other than zero-rated supplies) to Canadian consumers for the 12-month period preceding July 1, 2021, are $500,000,000 CAD.

Based on its past and projected revenues, the expected total revenues of the vendor from specified supplies (other than zero-rated supplies) to Canadian consumers for the 12-month period beginning on July 1, 2021, is $500,000,000 CAD on July 1, 2021. The threshold amount of the vendor is therefore $500,000,000 CAD on July 1, 2021.

Because the threshold amount of the vendor exceeds $30,000 CAD on July 1, 2021, the vendor is required to be registered on that day and is required to apply for registration on that day.

Example 2 - Registration threshold amount of specified non-resident supplier not exceeded on July 1, 2021

A non-resident vendor who is not registered for the GST/HST makes specified supplies of digital apps directly to customers around the world, including Canadian consumers. The total revenues of the vendor from these supplies (other than zero-rated supplies) to Canadian consumers for the 12-month period preceding July 1, 2021, are $20,000 CAD.

Based on its past and projected revenues, the expected total revenues of the vendor from specified supplies (other than zero-rated supplies) to Canadian consumers for the 12-month period beginning on July 1, 2021, is $20,000 CAD on July 1, 2021. The threshold amount of the vendor is therefore $20,000 CAD on July 1, 2021.

Because the threshold amount of the vendor does not exceed $30,000 CAD on July 1, 2021, the vendor is not required to be registered on that day and is not required to apply for registration on that day.

Example 3 - Registration threshold amount of distribution platform operator exceeded on July 1, 2021

A non-resident distribution platform operator who is not registered for the GST/HST operates a digital platform through which non-registered non-resident vendors make specified supplies of digital apps to customers around the world, including Canadian consumers.

The total revenues of the non-resident vendors from these supplies (other than zero-rated supplies) to Canadian consumers are $700,000,000 CAD for the 12-month period preceding July 1, 2021. The total revenues of the platform operator for its own digital apps that it supplies directly to Canadian consumers (other than zero-rated supplies) are $200,000,000 CAD for the 12-month period preceding July 1, 2021. The total revenues of the platform operator for its supplies (other than zero-rated supplies) made to the non-resident vendors who use its platform are $10,000,000 CAD for the 12-month period preceding July 1, 2021.

Based on its past and projected revenues, the expected total revenues of the platform operator from its own specified supplies (other than zero-rated supplies) to Canadian consumers, including the revenues of the vendors making such supplies that are facilitated through the platform, for the 12-month period beginning on July 1, 2021, is $900,000,000 CAD. The threshold amount of the platform operator is therefore $900,000,000 CAD on July 1, 2021.

Since the threshold amount of the platform operator exceeds $30,000 CAD on July 1, 2021, the platform operator is required to be registered on that day and is required to apply for registration on that day.

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