Understanding Canadian Taxes on Amazon Fees
The taxability of Amazon.ca seller fees varies based on several factors:
The type of services purchased
The Amazon entity providing the services
Federal and provincial tax laws
Participation in the Tax Calculation Service (TCS)
Business information supplied to Amazon, including the federal/provincial registration number
The location of the business or where an FBA service is performed
For detailed information, refer to Amazon's help article on Canadian sales tax on Amazon fees.
Tax Application on Amazon Seller Fees by Jurisdiction
The charts below illustrate when an Amazon.ca seller fee may be subject to sales tax in various Canadian jurisdictions.
Selling on Amazon (SoA) Fees
(based on your business location)
Seller Business Location | Canada GST/HST | PST/QST |
Alberta | Taxable | Taxable |
British Columbia | Taxable | - |
Manitoba | Taxable | Not-taxable |
New Brunswick | Taxable | - |
Newfoundland | Taxable | - |
Northwest Territories | Taxable | - |
Nova Scotia | Taxable | - |
Nunavut | Taxable | - |
Ontario | Taxable | - |
Prince Edward Island | Taxable | - |
Quebec | Taxable | Taxable |
Saskatchewan | Taxable | Not-taxable (except monthly subscription fees, which are taxable) |
Yukon | Taxable | - |
If Store Tax Collection applies to a buyer order, GST/HST or QST will be zero rated on your Amazon.ca per-order related SoA fees (for example, the referral fee, variable closing fee, tax calculation service fee and other per-order item fees). |
Amazon Advertising (ads) fees(based on your business location) |
Seller Business Location | Canada GST/HST | PST/QST |
Alberta | Taxable | - |
British Columbia | Taxable | Taxable (except Managed Ads fees) |
Manitoba | Taxable | Not-taxable |
New Brunswick | Taxable | - |
Newfoundland | Taxable | - |
Northwest Territories | Taxable | - |
Nova Scotia | Taxable | - |
Nunavut | Taxable | - |
Ontario | Taxable | - |
Prince Edward Island | Taxable | - |
Quebec | Taxable | - |
Saskatchewan | Taxable | Not-taxable (except managed ads fees) |
Yukon | Taxable | - |
Fulfilment by Amazon (FBA) fees(based on the fulfilment centre location) |
FBA Fulfillment Centre Location | Canada GST/HST | PST/QST |
Alberta | Taxable | - |
British Columbia | Taxable | Taxable (as of July 1, 2022) |
Ontario | Taxable | - |
Quebec | Taxable | Taxable |
If Store Tax Collection applies to a buyer order, GST/HST or QST will be zero rated on your Amazon.ca per-order related FBA service fees (for example, the pick & pack fee, shipping commission and other per-order FBA fees). |
Setting up Canadian Taxes in Taxomate
We don't have a way to split fees by fulfillment center location. As a workaround:
In Taxomate, set GST/HST on Purchases as the tax rate for all Amazon Fees (Advertising, Commissions and Selling Fees, Delivery and Transport, Fulfillment and Warehousing, and Subscription and Service Fees).
Once a month, Use the monthly tax invoices from Amazon to adjust the taxes directly inside Xero or QuickBooks.
Steps to Adjust for Canadian PST/QST on Fees:
Navigate to Reports > Tax Document Library on Amazon Seller Central
Under Seller Fee Invoices, download the invoices for that month.
Make a journal entry in Xero/QuickBooks to adjust:
Credit the total fees from the relevant fees account with your GST/HST on the Purchase tax rate.
Replace them with the correct PST/QST tax rates.
Example for a Business Established in Ontario:
You would effectively make a journal entry crediting the total fees from the relevant fees account with your GST/HST on the Purchases tax rate and then replace them with the correct PST/QST tax rates.
Here's an example of what the tax summary section looks like on an Amazon tax invoice:
Sample Journal Entry in QuickBooks:
What We Have Done:
-$346.60 FBA fees with HST ON on Purchases (Credit)
+$328.40 FBA fees with GST/PST BC on Purchases (Debit)
+$18.20 FBA fees with GST/QST QC on Purchases (Debit)
This ensures that the total FBA Fees remain the same, but now the correct tax rates are applied to each corresponding province.