[et_pb_section fb_built=”1″ admin_label=”About” _builder_version=”4.27.7″ background_enable_pattern_style=”on” background_pattern_style=”ogees” background_pattern_color=”rgba(0,0,0,0.01)” custom_padding=”||2px|||” global_colors_info=”{}”][et_pb_row _builder_version=”4.16″ global_colors_info=”{}” custom_padding=”||16px|||”][et_pb_column type=”4_4″ _builder_version=”4.16″ global_colors_info=”{}”][et_pb_text _builder_version=”4.27.8″ text_font=”Darker Grotesque|600|||||||” text_text_color=”#283444″ text_font_size=”22px” ul_line_height=”1.5em” header_2_font=”Darker Grotesque|900|||||||” header_2_text_color=”#05619b” header_2_font_size=”40px” header_3_text_color=”#38b349″ hover_enabled=”0″ text_font_size_tablet=”22px” text_font_size_phone=”18px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”42px” header_2_font_size_phone=”30px” header_2_font_size_last_edited=”on|phone” global_colors_info=”{}” sticky_enabled=”0″ custom_margin=”||0px|||”]<\/p>\n
Selling through Amazon FBA gives Canadian entrepreneurs access to the U.S. market without building their own warehousing and fulfillment network. The tax side is less straightforward. Once inventory enters the United States, a Canadian seller needs to consider U.S. federal income tax, the Canada-US Tax Treaty, state sales tax, marketplace-facilitator rules, entity structure, Canadian income tax, GST\/HST, foreign tax credits, and ongoing reporting obligations.<\/p>\n
A common mistake is assuming Amazon handles all tax matters because the platform collects sales tax in many states. Marketplace sales-tax collection addresses only one part of the picture \u2014 it does not determine whether the seller has a U.S. trade or business, a permanent establishment, U.S. income-tax filing obligations, Canadian corporate tax obligations, or other cross-border reporting requirements. The correct analysis starts with the seller’s residence, legal structure, inventory locations, activities in each country, and sales channels.<\/p>\n
[\/et_pb_text][et_pb_text _builder_version=”4.27.8″ text_font=”Darker Grotesque|600|||||||” text_text_color=”#283444″ text_font_size=”22px” ul_line_height=”1.5em” header_2_font=”Darker Grotesque|900|||||||” header_2_text_color=”#05619b” header_2_font_size=”40px” header_3_text_color=”#38b349″ hover_enabled=”0″ text_font_size_tablet=”22px” text_font_size_phone=”18px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”42px” header_2_font_size_phone=”30px” header_2_font_size_last_edited=”on|phone” global_colors_info=”{}” sticky_enabled=”0″ background_color=”#e0e0e0″]<\/p>\n
\nAt a Glance<\/b><\/strong><\/h3>\nUnder Fulfillment by Amazon, a seller sends inventory to Amazon’s fulfillment network, and Amazon generally handles storage, picking, packing, shipping, customer service, and returns. Commercially, this simplifies U.S. expansion. For tax purposes, the physical movement and storage of that inventory becomes an important fact on its own.<\/p>\n A Canadian seller should know where inventory is located and should not assume that operating the business from Canada means all business activity occurs in Canada. For U.S. federal income-tax purposes, foreign persons engaged in a U.S. trade or business generally need to consider whether their income is effectively connected with that business, and selling products through a U.S. trade or business can produce effectively connected income.<\/p>\n For a Canadian resident entitled to treaty benefits, the analysis does not end with U.S. domestic tax law. The Canada-US Tax Treaty generally provides that the business profits of a Canadian resident are taxable in the United States only where that resident carries on business through a permanent establishment there, with the U.S. then taxing the profits attributable to that establishment. U.S. trade or business and permanent establishment are related concepts, but they are not interchangeable \u2014 this distinction is critical.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ admin_label=”Services” _builder_version=”4.27.7″ background_enable_color=”off” custom_padding=”4px||11px||false|false” locked=”off” global_colors_info=”{}”][et_pb_row custom_padding_last_edited=”on|phone” _builder_version=”4.27.7″ background_color=”#0674ba” custom_margin=”||||false|false” custom_margin_tablet=”0px|auto||auto|false|false” custom_margin_phone=”” custom_margin_last_edited=”on|desktop” custom_padding=”||6px||false|false” custom_padding_tablet=”|||30px|false|false” custom_padding_phone=”|||20px|false|false” box_shadow_style=”preset1″ box_shadow_color=”#FFFFFF” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ global_colors_info=”{}”][et_pb_text _builder_version=”4.27.8″ text_text_color=”#FFFFFF” header_2_font=”Darker Grotesque|900|||||||” header_2_text_color=”#FFFFFF” header_2_font_size=”48px” header_3_font=”|700|||||||” header_3_text_color=”#FFFFFF” custom_padding=”|35px||35px|false|false” hover_enabled=”0″ header_2_font_size_tablet=”42px” header_2_font_size_phone=”30px” header_2_font_size_last_edited=”on|phone” global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n U.S. Domestic Law vs. the Canada-US Tax Treaty<\/b><\/strong><\/h3>\n |