Most Canadian-resident LLC owners do not realize that GST/HST registration can apply to them based on their personal Canadian residency, even when invoicing through a US LLC. CRA does not look at where the entity is incorporated. It looks at the place of supply rules and whether the person carrying on the business is a Canadian resident with worldwide taxable supplies above CAD $30,000. This post is the place-of-supply decision tree, the provincial rate matrix, and the four most common scenarios for Canadian SaaS founders, consultants, and FBA sellers.
30-second answer
If your worldwide taxable supplies exceed CAD $30,000 over a single calendar quarter or four consecutive calendar quarters, you must register for GST/HST and start collecting on supplies deemed made in Canada. Sales to US and other foreign customers are typically zero-rated (0%) and do not count toward triggering, but they still allow you to claim Input Tax Credits (ITCs) on your business expenses. Sales to Canadian customers are taxable at 5% to 15% depending on the province where the supply is made. The trigger is on you as a Canadian resident, not on the US LLC's location.
The CAD $30K trigger explained
The "small supplier" threshold is CAD $30,000 in worldwide taxable supplies (including zero-rated supplies). Two trigger paths exist, and most owners miss the single-quarter path.
| Trigger | Effective registration date |
|---|---|
| Single calendar quarter exceeds $30K | The day you cross the threshold (immediate; no grace period) |
| Four consecutive calendar quarters cumulatively exceed $30K | The first day of the second month after the quarter you crossed |
The single-quarter path catches founders who have a sudden burst of revenue, such as a SaaS launch month or a large consulting engagement. The day you cross $30K in that quarter, you are no longer a small supplier. You must charge GST/HST on every Canadian-supply transaction starting that day.
The four-quarter path applies for slower revenue ramps. You add up the most recent four calendar quarters; if the sum exceeds $30K, you have one full month after that quarter ends, then registration is mandatory.
Worldwide taxable supplies count both Canadian and zero-rated sales. A Canadian SaaS founder selling $40K to US customers crosses the $30K trigger even though no Canadian customers exist. The triggering happens; what changes is whether GST/HST collection actually applies on most of that revenue (it does not, because US sales are zero-rated).
Place-of-supply decision matrix
Whether GST/HST applies to a transaction depends on whether the supply is "made in Canada" under the place-of-supply rules. This is the most-misunderstood part of GST/HST for cross-border founders.
| Supply type | Customer location | GST/HST treatment |
|---|---|---|
| Service (B2B) | Canadian business in any province | GST/HST at supply-province rate |
| Service (B2B) | US or other foreign business | Zero-rated (0%) if service performed for use outside Canada |
| Service (B2C) | Canadian individual | GST/HST at customer-province rate |
| Service (B2C) | US or other foreign individual | Zero-rated if service performed for use outside Canada |
| Digital service / SaaS | Canadian customer (B2B or B2C) | GST/HST at customer-location rate |
| Digital service / SaaS | US or other foreign customer | Zero-rated |
| Goods | Customer in Canada | GST/HST at delivery-province rate |
| Goods | Customer outside Canada (export) | Zero-rated if export documentation maintained |
| Real property | Located in Canada | GST/HST applies; provincial sales tax may add |
| Professional services (legal, accounting, consulting) | Canadian client | GST/HST at client's province rate |
Zero-rated does not mean exempt. Zero-rated supplies allow ITC recovery; exempt supplies do not. Most Canadian-owned US LLCs prefer the zero-rated path because it lets the LLC reclaim GST/HST paid on Canadian business expenses.
Provincial rate matrix
Canadian sales tax rates vary by province. GST is the federal 5%, HST is the harmonized federal+provincial in five provinces, and Quebec uses QST in addition to GST. Other provincial sales taxes (BC PST, Saskatchewan PST, Manitoba RST) apply separately and do not flow through CRA.
| Province | Rate | Type | Filing |
|---|---|---|---|
| Alberta (AB) | 5% | GST only | CRA federal |
| British Columbia (BC) | 5% GST + 7% PST | GST + separate PST | CRA + BC Ministry of Finance |
| Manitoba (MB) | 5% GST + 7% RST | GST + separate RST | CRA + MB Taxation |
| New Brunswick (NB) | 15% | HST | CRA |
| Newfoundland and Labrador (NL) | 15% | HST | CRA |
| Northwest Territories (NT) | 5% | GST only | CRA |
| Nova Scotia (NS) | 15% | HST | CRA |
| Nunavut (NU) | 5% | GST only | CRA |
| Ontario (ON) | 13% | HST | CRA |
| Prince Edward Island (PE) | 15% | HST | CRA |
| Quebec (QC) | 5% GST + 9.975% QST | GST + separate QST | CRA + Revenu Quebec |
| Saskatchewan (SK) | 5% GST + 6% PST | GST + separate PST | CRA + SK Ministry of Finance |
| Yukon (YT) | 5% | GST only | CRA |
For cross-border consulting clients, you charge based on the client's location for services delivered to that location. If a Toronto client buys, you charge 13% HST. If a Halifax client buys, 15% HST. If a Vancouver client buys, 5% GST plus separate BC PST registration may apply.
Voluntary registration and Input Tax Credits
Even if you are below CAD $30K, voluntary registration can pay off when you have meaningful Canadian business expenses paying GST/HST. Once registered, you reclaim those amounts as Input Tax Credits.
| Scenario | Voluntary registration ROI |
|---|---|
| Canadian SaaS founder, $20K revenue, $5K Canadian expenses (hosting, software) | Voluntary registration recovers ~$650 in ITCs annually; minor admin overhead |
| Canadian consultant, $25K revenue, mostly US clients, $2K Canadian expenses | ~$260 ITC recovery; not worth the admin |
| Canadian FBA seller, $15K revenue, $8K Canadian inventory and shipping | ~$1,040 ITC recovery; worth registering voluntarily |
| Canadian rental property owner with US LLC | Real property GST applies; voluntary registration often required regardless |
Voluntary registration locks you into GST/HST collection (or zero-rating) on all future supplies. You cannot deregister until 12 months later if your situation reverses. Plan for the ongoing administrative overhead.
Filing cadence and Quick Method
Once registered, your filing frequency depends on annual taxable supplies.
| Annual taxable supplies | Required filing frequency | Optional filing frequency |
|---|---|---|
| Less than $1.5M CAD | Annual | Quarterly or monthly |
| $1.5M to $6M CAD | Quarterly | Monthly |
| Over $6M CAD | Monthly | None (cannot reduce) |
The Quick Method election simplifies GST/HST accounting for small businesses. Instead of tracking ITCs in detail, you remit a fixed percentage of your gross billable amount based on your business type. This is most useful for service businesses with low input costs.
| Business type | Quick Method remittance rate (selected examples) |
|---|---|
| Consulting service in Ontario (HST 13%) | 8.8% of gross |
| Service in BC, MB, NB (where GST 5% only) | 3.6% of gross |
| Service in Quebec (combined GST+QST) | varies |
You cannot use Quick Method if you provide legal, accounting, or financial services or if your annual taxable supplies exceed $400K.
CRA's "carrying on business in Canada" test for LLCs
Whether your US LLC itself becomes a CRA-registered taxpayer depends on whether it "carries on business in Canada." CRA looks at 13 factors to decide:
- Place where contracts are made
- Place where payment is made
- Location of inventory or assets
- Place of business
- Place of purchasing
- Place of sales agents
- Bank account location
- Books and records location
- Place of incorporation
- Place of management decisions
- Branch office in Canada
- Telephone listing in Canada
- Solicitation of customers in Canada
When a Canadian-resident owner runs a US LLC from Canada, factors 4, 6, 8, 10, and possibly 12 lean toward "carrying on business in Canada." This can trigger LLC-level GST/HST registration even before the owner-level $30K threshold.
The conservative approach for substantial-revenue Canadian-owned LLCs: assume CRA will treat the LLC as carrying on business in Canada and register the LLC for GST/HST as a non-resident with no Canadian permanent establishment. The LLC posts a security deposit (usually one year of expected GST/HST), and CRA assigns a non-resident GST/HST account.
Simplified GST/HST registration for digital businesses (2021 regime)
CRA's Simplified GST/HST regime, in force since July 1, 2021, provides a lighter-weight registration path for non-resident vendors selling digital products and services to Canadian consumers. The regime targets two specific groups: cross-border digital businesses (subscriptions, downloads, SaaS to consumers) and online marketplace operators. A Canadian-owned US LLC selling SaaS to Canadian consumers can fit this category in some scenarios.
Key differences between Simplified and standard non-resident GST/HST registration:
| Feature | Simplified GST/HST | Standard (full) registration |
|---|---|---|
| Who can use it | Non-resident vendors of digital products/services to Canadian consumers (B2C) | Any registrant |
| Threshold | CAD $30,000 in B2C digital supplies to Canada in 12 months | CAD $30,000 worldwide taxable supplies |
| Registration form | RC7524 + supporting docs | RC1 + non-resident security deposit |
| Security deposit | Not required | Required (typically 1 year of expected GST/HST) |
| ITC recovery | Not available | Available |
| Filing format | Simplified return, less detail | Full return with line-by-line ITC tracking |
The trade-off: Simplified is easier to set up and file, but you lose ITC recovery on Canadian-side business expenses. For a Canadian-resident owner running a US LLC with mostly Canadian SaaS customers and few Canadian expenses, Simplified can be the right path. For owners with significant Canadian expenses (hosting, contractors, software), standard registration with ITC recovery is usually better despite the heavier admin.
B2B sales to Canadian businesses with their own GST/HST registration generally fall outside Simplified's scope — those are reverse-charged to the Canadian buyer under the standard rules. Simplified is specifically for B2C sales where the Canadian consumer would otherwise pay no GST/HST.
Worked examples
Case 1: SaaS founder, $50K annual revenue, all US customers
Toronto-based founder owns a Wyoming LLC. $50K in SaaS subscriptions to US customers only.
| Item | Result |
|---|---|
| Worldwide taxable supplies | $50K (above $30K trigger) |
| Customer location | All US, so all sales zero-rated |
| GST/HST collected on sales | $0 |
| GST/HST registration | Mandatory (over threshold) |
| ITC recovery on Canadian expenses | Yes, fully reclaimable |
| Filing | Annual is allowed (under $1.5M) |
The triggering happens because of the $30K worldwide threshold, but no GST/HST is actually charged to customers (all zero-rated). The benefit is ITC recovery on Canadian expenses.
Case 2: Consulting LLC, $200K mixed clients
Vancouver consultant owns a Delaware LLC. $150K from US clients, $50K from Canadian clients (Ontario business).
| Item | Result |
|---|---|
| Worldwide taxable supplies | $200K (above threshold) |
| GST/HST registration | Mandatory |
| HST on Ontario client invoices | 13% on $50K = $6.5K collected and remitted |
| Zero-rated US client invoices | $150K, no HST collected |
| ITC recovery | Yes, on all Canadian expenses |
| BC PST registration | Required if BC client supplies are involved (separate from CRA) |
| Filing frequency | Quarterly |
Case 3: FBA seller, $300K with Canadian inventory portion
Halifax founder owns a Wyoming LLC selling on Amazon. $250K to US customers via Amazon US, $50K to Canadian customers via Amazon Canada.
| Item | Result |
|---|---|
| Worldwide taxable supplies | $300K (above threshold) |
| US sales | Zero-rated |
| Canadian sales (Amazon Canada) | HST/GST applies based on customer-province |
| Amazon Canada as supplier of record | Amazon collects HST on behalf in many provinces |
| Owner registration with CRA | Required for the seller portion not handled by Amazon |
| ITC recovery | Yes, on Canadian inventory and shipping |
Case 4: Digital course creator, $80K small supplier voluntary
Calgary founder, $20K from Canadian customers, $60K from US customers.
| Item | Result |
|---|---|
| Worldwide taxable supplies | $80K (above threshold) |
| GST/HST registration | Mandatory |
| Canadian sales tax | 5% GST in Alberta-domiciled customers, varying for other provinces |
| US sales | Zero-rated $60K |
| ITC on platform fees, hosting | Reclaimable |
| Filing frequency | Annual eligible |
Penalty structure
GST/HST late filing and late registration penalties accumulate quickly and survive bankruptcy in many cases.
| Issue | Penalty |
|---|---|
| Late filing of GST/HST return | $25 to $100 minimum + 1% of net tax owed + 0.25% per month (max 12 months) |
| Late registration | CRA can assess GST/HST on unfiled supplies retroactively to the trigger date |
| Failure to register when required | CRA assesses tax based on its estimate of supplies; ITCs may be denied |
| Interest on amounts owed | Prescribed CRA rate, currently around 9% annually |
The late-registration risk is particularly steep. CRA can look back to the day you crossed $30K and assess GST/HST on every supply since. If you discover this years later, you owe the full amount plus interest plus penalties, and ITC recovery may be limited by the four-year filing window for input tax credits.
Frequently asked questions
Do I have to register if all my customers are in the US?
You may have to. The $30K trigger counts worldwide taxable supplies, including zero-rated sales to US customers. Once over the threshold, registration is mandatory even though the GST/HST you collect is $0 on US-customer revenue. The benefit is ITC recovery on Canadian expenses. Failing to register can lead to CRA assessing later and denying ITCs you could have claimed.
My US LLC has its own EIN. Do I register for GST/HST under the LLC name or under my personal name?
Both are possible. The cleaner path is to register the US LLC as a non-resident GST/HST registrant with no permanent establishment. CRA assigns a non-resident GST/HST number, and you file under the LLC. If you also have personal Canadian self-employment income (T2125 sources outside the LLC), you may need a separate registration for that activity.
What is the difference between zero-rated and exempt for my services?
Zero-rated means the rate is 0% but you can claim Input Tax Credits on related expenses. Exempt means no GST/HST collected and no ITC recovery available. Most cross-border services to non-Canadian customers fall under zero-rated, which is favorable. Educational, financial, and certain healthcare services are exempt.