Setting Canadian tax exemptions
You can set exemptions for your customers to prevent them from being charged specific taxes. For example, you can set exemptions for First Nations status holders or resellers based in particular provinces.
On this page
Customer tax exemptions in Canada
You can apply the following tax exemptions to your customers in Shopify. Exemptions are available for those provinces where you are registered for taxes. If you haven't yet registered, then refer to Setting up Canadian taxes.
| Exemption | Description |
|---|---|
| Canada status card | Applies to First Nations peoples of Canada that hold a valid Certificate of Indian Status (HST, PST, RST, and QST). This exemption applies to the provincial portion of taxes for both individuals and organizations. Exemptions exist in all provinces, so you should check with your provincial tax agency for more details. |
| Canada diplomat | Applies to Canadian diplomats in Manitoba (GST, RST) and Nova Scotia (HST). Exemptions differ from province to province, so you should check with your provincial tax agency for more details. |
| Reseller | Applies to customers that purchase goods for resale or lease in British Columbia (PST), Manitoba (RST), and Saskatchewan (PST). |
| Fishery | Applies to customers that purchase goods for use in commercial fishing in British Columbia (PST), Manitoba (RST), Nova Scotia (HST), Prince Edward Island (HST), and Saskatchewan (PST). |
| Production and machinery | Applies to customers that purchase production machinery in British Columbia (PST) and Saskatchewan (PST). |
| Contractor | Applies to contractors in British Columbia (PST) and Saskatchewan (PST). |
| Subcontractor | Applies to subcontractors in British Columbia (PST) and Saskatchewan (PST). |
| Ontario purchase | Applies to vehicle purchases in Ontario (RST). |
| Farmer | Applies to purchases of farming equipment in Manitoba (RST), Nova Scotia (HST), and Saskatchewan (PST). |
Customers that are eligible for exemption from taxes will have a certificate or other form of documentation proving their status. When a customer contacts you to indicate that they have a tax exemption, you can ask them for a copy of this documentation. If you're not sure if your customer is eligible, then you should request documentation and check with the appropriate tax authority.
Set a customer tax exemption in Canada
To learn more about available tax exemptions, refer to Customer tax exemptions in Canada.
From your Shopify admin, go to Customers.
Click a customer that you want to set tax exemptions for.
In the Customer section, click
, and then click Edit tax details.In the Tax settings section, select whether to collect tax:
- To collect tax, select Collect tax.
- To not collect tax, select Don't collect tax.
- To collect tax except for applicable exemptions, select Collect tax unless exemptions apply, and then select or search for the applicable exemption in the Select exemptions drop-down menu.
Click Save.
Verifying whether your customers are eligible for these exemptions is your responsibility. It's not possible to verify exemptions from the Shopify admin.
Product and shipping tax overrides
If you need to override your tax rates for specific products and shipping rates, then you can set tax exemptions by using collections. Refer to Tax overrides and exemptions to learn more.
If you use Shopify Tax, then product categories are used to improve the accuracy of tax calculations. This includes the tax obligations and exemptions that customers have when they purchase particular products, reducing the need for tax overrides. When you set a product category for a product that has an override in place, the override takes precedence over product category tax calculations. If you use Shopify Tax, then consider removing any product tax overrides that conflict with your product categories. However, if you're aware of tax rules that aren't calculated by product categories, then keep your product tax overrides.
Tax exemptions on POS
Any tax exemptions that you've set up are applied when using the Shopify POS app. Depending on the device that you use, tax exemptions display as follows in the POS app:
- On Android devices, the subtotal is updated to reflect the new tax amount as soon as you select a tax-exempt customer.
- On iOS devices, the subtotal remains the same until you tap the Charge button. After you tap the button, a prompt indicating the new price is displayed.