Shopify Tax features in Canada
If you're located in or ship to Canada, then you can choose to activate Shopify Tax. Shopify Tax can help you maintain sales tax compliance and help you to manage the complexity of collecting GST, HST, PST, QST, and RST in Canada.
Some features of Shopify Tax aren't yet available in Canada. Refer to the following table for feature availability information.
| Feature | Availability |
|---|---|
| Automatic rate calculations using tax registrations | ✔ |
| Automatic rate calculations using product categories | ✔ |
| Tax liability insights | ✔ |
| Tax reports | ✔ |
| Advanced tax reports | ✘ |
On this page
Features of Shopify Tax in Canada
When you migrate from Basic Tax to Shopify Tax in Canada, there are some changes to your pricing and how your store calculates taxes.
Automatic tax rates based on product categories
Shopify Tax uses product categories to automatically determine the tax rates for products that are tax exempt or zero-rated, such as groceries. This improves the accuracy of your tax calculations and reduces the need for tax overrides for your products.
Tax liability insights in Canada
The tax liability insights section in your tax settings can help you to determine your tax liabilities in Canada. Your sales and locations are automatically monitored to help you determine whether you have tax liabilities in Canada or in specific provinces.
Pricing for Shopify Tax in Canada
You can use Shopify Tax without fees until your threshold of global sales reaches $100,000 CAD. This threshold applies to each store individually. If you have more than one store, then each store has its own threshold for the amount of sales that you can make before fees apply for using Shopify Tax.
After you reach or exceed the sales threshold, the following fees apply for Shopify Tax:
- Stores on the Plus plan pay a 0.15% fee on Canadian orders that are calculated with Shopify Tax, capped at $0.99 CAD per order.
- Stores on the Starter, Basic, Grow, and Advanced plans pay a 0.25% fee on Canadian orders that are calculated with Shopify Tax, capped at $0.99 CAD per order.
Migrating from Basic Tax to Shopify Tax in Canada
When you're ready to upgrade to Shopify Tax in Canada, review the following checklist:
If a tax calculation can't be performed by Shopify Tax for an order with a destination in Canada, then the tax calculation is performed by using registration-based, non-rooftop accurate calculations. For more information, refer to Canadian taxes and to Basic Tax service settings.
Calculations using Shopify Tax in Canada aren't available in the following scenarios:
- Orders that are shipped to a country other than Canada.
- Third-party app and API-generated orders, such as Buy Button, Facebook, or Amazon orders.
- Orders that contain one or more products with an associated product or shipping rate tax override.
Shopify Tax automatically determines tax rates based on product categories, so it's important that you ensure your categories are accurate. Unless you've created products by uploading a CSV or using an app, your products already have suggested product categories.
It's your responsibility to verify that your product categories are correct, including those that are automatically suggested in your Shopify admin. Applying inaccurate product categories might result in collecting too much or not enough tax when product categories are used to calculate taxes. If you have products that are uncategorized or have inaccurate categories, then you can manage your product categories individually, in bulk, or by uploading a CSV.
If you're not sure that your product categories are correct, then contact a tax expert.
If you set a tax override, then it takes precedence over the rates calculated by Shopify Tax. However, because Shopify Tax automatically determines tax rates based on product categories, your existing overrides might no longer be necessary. You can test your setup by removing a tax override and placing a test order to confirm that taxes are calculated correctly for your products. It's recommended that you record the details of your tax override before deleting it, and that you test one override at a time.