Ecommerce business expenses in Canada: GST/HST on imports, Form B3, and platform fees

A Canadian online seller imports most of its stock and pays most of its platform fees to companies based outside Canada. Two questions drive the bookkeeping: who collects the GST/HST on imported goods, and which document lets you claim it back. Get those right and the rest of ecommerce accounting in Canada is routine. All figures below are sourced from CRA guidance in the Sources section.

GST on imported goods is collected at the border

Goods imported into Canada are generally subject to 5% GST, payable on the duty-paid value, and the importer pays it directly to the Canada Border Services Agency when the goods are imported ^[1] .

This is the structural difference an online seller has to internalise: the GST on your imported stock is not on the supplier’s invoice. It is paid to CBSA at the border, which means the reclaim document is a customs form, not the purchase invoice.

Claiming the input tax credit with Form B3

A GST/HST registrant that imports goods for use, supply, or resale in its commercial activity can claim an input tax credit for the GST paid at the border ^[2] . The satisfactory proof is the CBSA Form B3-3, Canada Customs Coding Form, showing the GST was paid, examples of qualifying imports being raw materials, capital property, and goods acquired for resale ^[2] .

So an accurate ledger records the supplier invoice as the cost of goods and posts the import GST credit against the B3-3.

Marketplace and payment-processor fees

Selling and processing fees (Amazon, Shopify, Stripe, PayPal) are operating expenses, not cost of goods sold. If the platform is registered for GST/HST, its fees carry tax you claim as an input tax credit; for taxable services imported from an unregistered non-resident supplier, you may have to self-assess the GST/HST on your return ^[3] . The invoice and the supplier’s registration status tell you which path applies.

Cost of goods versus operating expenses

Cost of goods sold is the stock purchase price plus inbound freight and import duty. Marketplace fees, advertising, subscriptions, and packaging are operating expenses. The two blur when stock and fees both arrive as foreign-currency charges in the same period, but a clean split is what makes gross-margin reporting trustworthy.

Selling across provinces

One wrinkle is unique to Canada: the sales-tax rate you charge customers depends on the province of supply. The federal GST is 5%, but participating provinces apply the harmonized HST at 13% or 15%, and others add a separate provincial sales tax. An online seller shipping nationwide must apply the right rate to each destination, which makes a clean record of where each order ships an accounting requirement, not just a logistics detail. The import GST you reclaim, by contrast, is always the 5% federal portion paid at the border.

Where ExpenseFlow fits

Ecommerce throws off a high volume of cross-border invoices in several currencies. ExpenseFlow captures each receipt and supplier invoice, extracts the line detail and the currency, and syncs the transaction into Xero or QuickBooks Online with the source image attached for the six-year record-keeping window. Its cross-border checks flag a purchase from a foreign supplier that has not charged Canadian GST/HST, so it is recorded as a foreign-currency cost rather than wrongly treated as carrying a claimable credit, and they point you to the Form B3 customs document as the real basis for the import credit. It does not calculate import GST, file your GST/HST return, or split cost of goods from operating expenses: those stay with you or your accountant. What it removes is the manual keying and currency handling behind a busy online ledger.

Common mistakes

• Claiming the import GST credit from the overseas supplier’s invoice instead of the CBSA Form B3-3 ^[2] .
• Forgetting that import GST is paid to CBSA at the border, not to the supplier ^[1] .
• Assuming all platform fees carry a claimable credit when imported services from unregistered suppliers may need self-assessment ^[3] .
• Folding selling and processing fees into cost of goods, which distorts gross margin.