Quick Answer
Amazon FBA sellers in Canada must register for GST/HST themselves (Amazon.ca is not a marketplace facilitator), declare all Amazon profits as income on their tax return, and can deduct Amazon fees, storage costs, and COGS as business expenses.
Amazon FBA (Fulfilled by Amazon) in Canada creates specific tax obligations that differ from selling on Etsy or through your own Shopify store. The most critical difference: Amazon.ca is not a marketplace facilitator for GST/HST purposes, which means you — the seller — are responsible for all GST/HST compliance.
GST/HST for Amazon FBA Sellers
Unlike in the United States where Amazon handles sales tax collection in most states, Canadian Amazon FBA sellers must register for GST/HST themselves once they exceed $30,000 in revenue. This includes:
- Registering for a GST/HST business number with the CRA
- Configuring your Amazon Seller Central account to collect the correct taxes by province
- Filing GST/HST returns on the required schedule
- Remitting net tax to the CRA
Income Tax on Amazon FBA Profits
All profit from your Amazon FBA sales is taxable income in Canada. As a sole proprietor, you report this on Form T2125. As a corporation, on Form T2. Your taxable profit is:
Gross Amazon revenue − Amazon fees − COGS − Shipping − Advertising − Other expenses = Net taxable income
Deductible Amazon FBA Expenses
| Expense | Deductible? | Notes |
|---|---|---|
| Amazon referral fees | Yes | 8–15% of sale price depending on category |
| FBA fulfilment fees | Yes | Per-unit pick, pack, ship fees |
| FBA storage fees | Yes | Monthly and long-term storage |
| Amazon Sponsored ads | Yes | PPC advertising on Amazon |
| Product cost (COGS) | Yes | Only for units sold, not unsold inventory |
| Prep and inspection costs | Yes | Third-party prep centre fees |
Inventory and COGS
For FBA sellers, tracking COGS is more complex than for Shopify sellers because your inventory is physically located in Amazon's warehouses. You must track:
- Units purchased and their cost
- Units sold during the year (to calculate COGS)
- Units remaining in Amazon's warehouses at year-end (closing inventory)
Multi-Province FBA Inventory Creates Nexus
Amazon stores your FBA inventory across multiple Canadian fulfilment centres in different provinces. Some tax advisors argue this creates a GST/HST nexus in each province where your inventory is stored. While the CRA has not issued definitive guidance on this for Canadian sellers, you should register for GST/HST at the federal level — which covers sales across all provinces — to avoid any ambiguity.
Get Your Amazon FBA Taxes Right
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