Quick Answer
All Amazon sales revenue is taxable income in Canada. Report it as business income on Form T2125 (sole proprietor) or a T2 corporate return. Use your Amazon settlement reports to find gross sales, then deduct all eligible business expenses to arrive at your net taxable income.
Many new Amazon sellers are unsure whether their sales count as income. They do — fully. Whether you sell part-time or run a full-time FBA business, every dollar of Amazon revenue is taxable income that must be reported to the CRA.
Where to Find Your Total Amazon Revenue
Your gross revenue is not the same as your bank deposits. Log into Amazon Seller Central → Reports → Payments → Date Range Reports. Generate an annual summary report. The "Product Sales" line is your gross revenue before fees. This is what you declare as income.
Calculating Net Taxable Income
Formula: Gross Amazon revenue − Amazon fees − Cost of goods sold − Shipping − Advertising − Other eligible expenses = Net taxable income
As a sole proprietor, declare this net income on Form T2125 (Statement of Business or Professional Activities), which attaches to your T1 personal tax return. Incorporated sellers file this on a T2 corporate return.
What If You Sell on Multiple Platforms?
Add all platform revenues together — Amazon, Etsy, Shopify, and any other channels — for your total business income. You cannot report each platform separately to lower the appearance of income; all taxable supplies from business activities must be combined on a single T2125.
The CRA Knows About Your Amazon Sales
Since 2023, digital platforms operating in Canada are required under the OECD Reporting Framework to report seller data to the CRA annually. If your reported income doesn't match what Amazon has reported, expect a letter from the CRA. Report accurately from the start.
Let MaxRefund File Your Amazon Tax Return
MaxRefund prepares T1 and T2 tax returns for Canadian Amazon sellers, with full deduction optimization and CRA-compliant reporting.
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