Ecommerce business expenses in Canada: the complete guide for online sellers

A Canadian online seller pays GST/HST at the border on stock, charges it on sales at whichever provincial rate applies to the customer, and buys a stream of services from foreign platforms that may or may not charge it. The ITC on imports belongs to the importer named on the customs document. The GST charged by a foreign platform under the simplified framework cannot be claimed at all if you never gave it your registration number. And exports can be zero-rated if you can prove they left. This guide goes through the whole ledger, category by category, with a verdict for each one before the detail. Every figure is sourced to the Canada Revenue Agency in the Sources section, retrieved 10 October 2026.

What this guide covers: stock and cost of goods sold, GST/HST on imports and the importer’s ITC, foreign platform, app and ad fees, self-assessment, shipping and fulfilment, exports, equipment and CCA, staff, and the GST/HST, records and year-end work that tie it together.

The online seller’s ledger at a glance

The rest of this guide walks through each row, and every section opens with its verdict.

Where ExpenseFlow fits

ExpenseFlow captures each supplier invoice, broker bill, platform statement and app receipt (email forward, upload or phone), reads the line items, the currency and the GST, HST, PST or QST, codes each line with a written reason, and routes anything uncertain to a person before it posts. Its ecommerce checks are built from the rules on this page: marketplace and payment-processor fees are coded as operating expenses, not cost of goods sold, and flagged when billed from abroad; an overseas goods supplier’s invoice is flagged because the ITC comes from the customs accounting document; a foreign supplier’s local tax is flagged as not claimable in Canada; and mixed rates on one document are flagged. After approval the bill syncs to Xero with the source document attached, or to QuickBooks Online as a coded bill.

What it does not do: it does not reconcile marketplace payouts, value inventory, decide where a sale is taxed or file your GST/HST return. The ecommerce charts of accounts for Ontario, Alberta, British Columbia and Quebec line up with the categories below.

The ExpenseFlow for online sellers page covers these checks across all five countries.

Stock and cost of goods sold

You can deduct any reasonable current expense you incur to earn income ^[1] . For a seller that means opening inventory plus purchases less closing inventory as cost of goods sold, and the platform’s commission, the processor’s fee and delivery as operating expenses; delivery, freight and express costs are deductible in the year incurred ^[1] .

GST/HST on imports and the importer’s ITC

The GST or federal part of the HST on imported goods is collected at the time of importation, at the same time as duty and excise tax ^[2] . A registrant can claim an ITC for that tax if it is the importer who brings the goods in for consumption, use or supply in its commercial activities ^[3] . The customs form B3 identifies the importer; where a supplier or broker is importer of record, the buyer can still be treated as the importer for ITC purposes but must obtain a copy of the import documentation to support the claim ^[3] . The supplier’s invoice from abroad supports no ITC.

Foreign platform, app and ad fees

If you buy from a business registered under the simplified GST/HST framework, you must provide evidence that you are registered for GST/HST in order not to be charged the tax, and if you are charged you cannot claim input tax credits or a rebate for it ^[4] . Foreign vendors registered under the normal framework charge GST/HST you claim as ordinary ITCs ^[5] . Imported services and intangibles you use less than 90% in commercial activities must be self-assessed ^[2] ; a seller using them wholly in the business does not. All of these fees are operating expenses.

Shipping, fulfilment and marketing

Delivery, freight and express costs, supplies used to provide your goods, and advertising are deductible business expenses ^[1] . ITCs are claimed to the extent the purchase is used in your commercial activities ^[5] .

Exports

Goods and services normally subject to GST/HST may not be subject to it when exported from Canada, depending on the situation ^[2] . Carrier tracking to a foreign address and the commercial invoice are the usual evidence.

Equipment and capital cost allowance

Class 50 at 55% takes computer hardware, Class 8 at 20% property not in another class, and Class 12 at 100% tools and utensils under $500 ^[6] . The equipment guide covers the first-year rules.

Staff, CPP and EI

Gross salaries are deductible ^[1] . In 2026 CPP is 5.95% each on pensionable earnings between $3,500 and $74,600 ^[7] , and the employer pays 1.4 times the employee’s 1.63% EI premium on insurable earnings up to $68,900 ^[8] .

Registration, records and year end

You stop being a small supplier when taxable revenue goes over $30,000 in a single calendar quarter or over four consecutive quarters, with 29 days to register ^[9] . Records are kept for six years, as the record-keeping guide sets out; the GST/HST guide, GST/HST return guide and year-end checklist cover the rest.

Common mistakes

• Claiming import ITCs from the foreign supplier’s invoice ^[3] .
• Claiming import ITCs when a broker was importer of record and you hold no copy of the documents ^[3] .
• Paying GST/HST to a simplified-registered platform and claiming it ^[4] .
• Self-assessing imported services you use wholly in the business, or not self-assessing ones used less than 90% commercially ^[2] .
• Zero-rating exports without proof ^[2] .
• Putting platform fees in cost of goods sold.