The Requirements to Expand From
Amazon US to Amazon Canada
If you’re selling on Amazon.com, you’ve likely at least considered expanding to Canada at some point. It almost seems like a natural progression geographically to move your products into Canada from the USA. If you’re aiming to be a successful entrepreneur, it’s natural to look at and take advantage of any opportunity or avenue of growth, right?
It’s important to assess all the challenges as well as the benefits to expansion. On the one hand, Canada is culturally similar to America. On the other hand, Canadian taxes and regulations are completely foreign which might seem like the scary part to a lot of sellers.
The good news is that there is nothing to be really scared of. Many sellers have made the decision to expand to Amazon.ca and have paved the way for others who wish to do the same. Also, Amazon has taken additional steps to ensure expansion is easier for sellers. After all, the marketplace giant is all about providing the best possible experience for shoppers and enabling product diversity and availability falls neatly in that category.
What Is a North America United Account?
The NAUA is a feature that Amazon has made available to all Professional level sellers in North America at no additional cost. This feature makes it easier for sellers to expand to within North American marketplaces, which includes: Amazon.com (USA), Amazon.ca (Canada), and Amazon.mx (Mexico).
You can switch between these marketplaces from a drop-down menu located in the upper left corner of your Seller Central dashboard. Each market page features the same standard layout that you’re used to. However, fees per sold or stored item will vary within each market.
With this system, you will have the option of a Global SKU which allows you to share your total inventory across the different markets.This means that once a shopper purchases an item from any of the markets, your total inventory will be reduced by one for all markets. For example, if you have 50 units of a product, then your available quantity will be displayed as 50 for Canada, 50 for the US, and 50 for Mexico. If a customer makes a purchase from Canada, the total amount of available units will be reduced to 49 for Canada, 49 for the US, and 49 for Mexico.. Global SKUs are only available for items that you fulfill yourself.
If you’d rather take advantage of FBA services, you’ll need a marketplace-specific SKU which requires you to send separate shipments to designated FBA warehouses in each country.
Once you’ve sorted out how you want to handle fulfillment, running your Amazon account for each country should be a cakewalk. Everything resides under the familiar Seller Central UI after all. The thing that won’t be so familiar is operating as a foreign entity importing goods and selling in Canada.
Registering as Business in Canada
While you’re not required to have a legal entity in Canada, you are legally required to register for a business number (BN) with the Canada Revenue Agency (CRA) in order to do business there. The process is pretty straightforward and it can be done filling out the applicable parts of the RC1 form (ones applying to a non-residential business) and sending it to the appropriate tax office depending on where you are located within the United States.
Canada requires a business number to ensure that you’re in compliance with the Goods and Services Tax , the Harmonized Sales Tax , and the Provincial Sales Tax . It may sound like a big commitment, especially if you’re brand new to the market—but it is not as scary as it seems at first glance.
The Canadian Good and Services Tax (GST)
The Goods and Services Tax (GST) is, for all intents and purposes, a Canadian sales tax. In some ways it’s similar to the US sales tax, but not entirely. Based on the declared value of goods you’ve imported, you owe the Canadian government some amount of tax money. You must also charge customers GST and pay it to the government minus the amount you’ve already paid when your inventory was brought in.
The GST rate is flat at 5%. To help you better understand, here’s an example. Let’s say you’ve brought in C$10,000 worth of inventory within a year and that you’ve sold it within the same year for C$40,000. This is what you would owe to the CRA at the end of the year:
(This is a simplified example of how it works. Real-world scenarios can get a bit complicated. In some cases, you don’t have to pay GST for the entire amount of revenue you’ve made from sales.)
The Canadian Provincial Sales Tax
Unfortunately, the GST is not the only transactional sales tax you are required to file. The Canadian Provincial Sales tax, or PST, is a tax collected by four Canadian provinces on top of the GST. To be completely accurate, two of the provinces collect PST while Québec has a tax called Québec Sales Tax (QST) and Manitoba has a Retail Sales Tax (RST). These are the rates listed by province along with the federal GST rates:
These rates usually apply if you have at least C$10,000 in revenue from sales made in British Colombia or Saskatchewan. For Québec, the minimum is C$30,000. It’s best that you take time and contact each of the four finance ministries to see whether you’re obligated to pay their Provincial Sales Taxes Separately from GST/HST/QST as soon as you start selling.
The Provincial Ministry of Finance for each province collects these taxes, and you’d have to register for each of them separately. You can complete the applications online for British Columbia, Manitoba, Québec and Saskatchewan.
The Canadian Harmonized Sales Tax
Outside of those four, Canada has six others along with three northern territories. This leaves us with 13 total regions that constitute the entirety of Canada, with most having a way of claiming a portion of local sales. This is where the Harmonized Sales Tax, or HST, comes in. The Canada Revenue Agency collects this tax and it doesn’t require you to deal with an individual Ministry of Finance. The HST serves the same purpose as PST in the four previously mentioned provinces and is collected in 5 regions:
1. New-Brunswick
2. Newfoundland and Labrador
3. Nova Scotia
4. Ontario
5. Prince Edward Island
Ontario’s HST rate is 8% while the rest takes 10%. When accounted for both GST and HST, this is what your rates would look like:
There is no additional registration necessary for the purposes of collecting and paying HST. The Business Number you’ve acquired is all you need. As far as the remaining provinces are concerned, there is no PST or HST for those as of yet, but that may change. In fact, British Colombia was in the HST system for a brief period before returning to PST on April 1st, 2013.
For the remaining four regions, only the GST applies.
Paying Taxes and Currency Conversions
You are required to make your tax payments in CAD, not USD!
When you are selling globally it could get pricy to convert your Amazon payouts from Canadian dollars to local US dollars. On top of that, the Canadian tax authorities ONLY accept CAD, meaning you will have to convert your profits back to CAD to settle your foreign tax obligations.
Avoid paying unnecessarily high fees and inconveniently ‘double converting’ your money when you open a free multi-currency account with PingPong. To learn how you can bring home more global profits, make payments to GST for free, and more click here.
Conclusion
Expanding to Amazon Canada after the US is a natural step for anyone who is set on growing. The thought of expanding globally may sound daunting, quite frankly, no one enjoys dealing with taxes and jumping through hoops. Just remember setting up your business to sell in Canada is not the challenge—it’s a minor obstacle. The real challenge is making sales.
Get the latest tips to help you #moveforward in your ecommerce journey
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The Requirements to
Expand From Amazon US to Amazon Canada
If you’re selling on Amazon.com, you’ve likely at least considered expanding to Canada at some point. It almost seems like a natural progression geographically to move your products into Canada from the USA. If you’re aiming to be a successful entrepreneur, it’s natural to look at and take advantage of any opportunity or avenue of growth, right?
It’s important to assess all the challenges as well as the benefits to expansion. On the one hand, Canada is culturally similar to America. On the other hand, Canadian taxes and regulations are completely foreign which might seem like the scary part to a lot of sellers.
The good news is that there is nothing to be really scared of. Many sellers have made the decision to expand to Amazon.ca and have paved the way for others who wish to do the same. Also, Amazon has taken additional steps to ensure expansion is easier for sellers. After all, the marketplace giant is all about providing the best possible experience for shoppers and enabling product diversity and availability falls neatly in that category.
What Is a North America United Account?
The NAUA is a feature that Amazon has made available to all Professional level sellers in North America at no additional cost. This feature makes it easier for sellers to expand to within North American marketplaces, which includes: Amazon.com (USA), Amazon.ca (Canada), and Amazon.mx (Mexico).
You can switch between these marketplaces from a drop-down menu located in the upper left corner of your Seller Central dashboard. Each market page features the same standard layout that you’re used to. However, fees per sold or stored item will vary within each market.
With this system, you will have the option of a Global SKU which allows you to share your total inventory across the different markets.This means that once a shopper purchases an item from any of the markets, your total inventory will be reduced by one for all markets. For example, if you have 50 units of a product, then your available quantity will be displayed as 50 for Canada, 50 for the US, and 50 for Mexico. If a customer makes a purchase from Canada, the total amount of available units will be reduced to 49 for Canada, 49 for the US, and 49 for Mexico.. Global SKUs are only available for items that you fulfill yourself.
If you’d rather take advantage of FBA services, you’ll need a marketplace-specific SKU which requires you to send separate shipments to designated FBA warehouses in each country.
Once you’ve sorted out how you want to handle fulfillment, running your Amazon account for each country should be a cakewalk. Everything resides under the familiar Seller Central UI after all. The thing that won’t be so familiar is operating as a foreign entity importing goods and selling in Canada.
Registering as Business in Canada
While you’re not required to have a legal entity in Canada, you are legally required to register for a business number (BN) with the Canada Revenue Agency (CRA) in order to do business there. The process is pretty straightforward and it can be done filling out the applicable parts of the RC1 form (ones applying to a non-residential business) and sending it to the appropriate tax office depending on where you are located within the United States.
Canada requires a business number to ensure that you’re in compliance with the Goods and Services Tax , the Harmonized Sales Tax , and the Provincial Sales Tax . It may sound like a big commitment, especially if you’re brand new to the market—but it is not as scary as it seems at first glance.
The Canadian Good and Services Tax (GST)
The Goods and Services Tax (GST) is, for all intents and purposes, a Canadian sales tax. In some ways it’s similar to the US sales tax, but not entirely. Based on the declared value of goods you’ve imported, you owe the Canadian government some amount of tax money. You must also charge customers GST and pay it to the government minus the amount you’ve already paid when your inventory was brought in.
The GST rate is flat at 5%. To help you better understand, here’s an example. Let’s say you’ve brought in C$10,000 worth of inventory within a year and that you’ve sold it within the same year for C$40,000. This is what you would owe to the CRA at the end of the year:
(This is a simplified example of how it works. Real-world scenarios can get a bit complicated. In some cases, you don’t have to pay GST for the entire amount of revenue you’ve made from sales.)
The Canadian Provincial Sales Tax
Unfortunately, the GST is not the only transactional sales tax you are required to file. The Canadian Provincial Sales tax, or PST, is a tax collected by four Canadian provinces on top of the GST. To be completely accurate, two of the provinces collect PST while Québec has a tax called Québec Sales Tax (QST) and Manitoba has a Retail Sales Tax (RST). These are the rates listed by province along with the federal GST rates:
These rates usually apply if you have at least C$10,000 in revenue from sales made in British Colombia or Saskatchewan. For Québec, the minimum is C$30,000. It’s best that you take time and contact each of the four finance ministries to see whether you’re obligated to pay their Provincial Sales Taxes Separately from GST/HST/QST as soon as you start selling.
The Provincial Ministry of Finance for each province collects these taxes, and you’d have to register for each of them separately. You can complete the applications online for British Columbia, Manitoba, Québec and Saskatchewan.
The Canadian Harmonized Sales Tax
Outside of those four, Canada has six others along with three northern territories. This leaves us with 13 total regions that constitute the entirety of Canada, with most having a way of claiming a portion of local sales. This is where the Harmonized Sales Tax, or HST, comes in. The Canada Revenue Agency collects this tax and it doesn’t require you to deal with an individual Ministry of Finance. The HST serves the same purpose as PST in the four previously mentioned provinces and is collected in 5 regions:
1. New-Brunswick
2. Newfoundland and Labrador
3. Nova Scotia
4. Ontario
5. Prince Edward Island
Ontario’s HST rate is 8% while the rest takes 10%. When accounted for both GST and HST, this is what your rates would look like:
There is no additional registration necessary for the purposes of collecting and paying HST. The Business Number you’ve acquired is all you need. As far as the remaining provinces are concerned, there is no PST or HST for those as of yet, but that may change. In fact, British Colombia was in the HST system for a brief period before returning to PST on April 1st, 2013.
For the remaining four regions, only the GST applies.
Paying Taxes and Currency Conversions
You are required to make your tax payments in CAD, not USD!
When you are selling globally it could get pricy to convert your Amazon payouts from Canadian dollars to local US dollars. On top of that, the Canadian tax authorities ONLY accept CAD, meaning you will have to convert your profits back to CAD to settle your foreign tax obligations.
Avoid paying unnecessarily high fees and inconveniently ‘double converting’ your money when you open a free multi-currency account with PingPong. To learn how you can bring home more global profits, make payments to GST for free, and more click here.
Conclusion
Expanding to Amazon Canada after the US is a natural step for anyone who is set on growing. The thought of expanding globally may sound daunting, quite frankly, no one enjoys dealing with taxes and jumping through hoops. Just remember setting up your business to sell in Canada is not the challenge—it’s a minor obstacle. The real challenge is making sales.
Get the latest tips to help you #moveforward in your ecommerce journey
