GST/HST on digital products in Canada is a common question for creators, coaches, consultants, and freelancers selling online. If you sell Notion templates, ebooks, stock photos, paid downloads, memberships, recorded courses, or software, the basic rule is simple: most digital products are taxable supplies. The harder part is knowing when you must register, which rate to charge, and what happens when customers are outside Canada.
GST/HST on digital products in Canada: the basic rule
Digital products are generally treated like other taxable goods or services for GST/HST purposes. If you are registered for GST/HST and sell a taxable digital product to a customer in Canada, you normally charge GST/HST based on the customer's province or territory.
For example, if you are a sole proprietor in Alberta selling a $100 Canva template to a customer in Ontario, you generally charge 13% HST, not 5% GST. If the customer is in British Columbia, you generally charge 5% GST for the federal portion. Provincial PST rules may also apply in some provinces, but GST/HST registration is handled federally through the CRA.
This is separate from platform fees. Whether you sell through your own checkout, Shopify, Gumroad, Etsy, Kajabi, Teachable, or another platform, you still need to understand whether you are the supplier for tax purposes and whether the platform is collecting tax on your behalf.
Do digital product sales count toward the $30,000 threshold?
Yes, if they are taxable supplies. Revenue from Canadian digital product sales generally counts toward the CRA's small supplier threshold. That threshold is not based on the calendar year. It is based on your taxable supplies over a rolling 12-month period, as explained in our guide to how the GST/HST threshold works.
Once your taxable worldwide supplies exceed $30,000, you usually have to register for GST/HST and start charging tax on taxable sales after the point you cross the threshold. If you are getting close, use HST Heroto track your rolling revenue automatically instead of trying to rebuild the CRA's calculation in a spreadsheet.
What digital products are usually taxable?
For most independent creators, these are usually taxable when sold to Canadian customers:
- Ebooks, PDFs, templates, swipe files, and digital downloads
- Recorded courses, workshops, and paid video libraries
- Membership sites and paid communities with digital resources
- Software, apps, plugins, themes, and SaaS subscriptions
- Stock photos, music files, design assets, and code snippets
There are exceptions in the GST/HST system, but do not assume your product is exempt just because it is educational or delivered online. A self-paced course sold by an independent creator is usually different from exempt tuition charged by a recognized school. If you are unsure, compare the rules in our article on zero-rated vs exempt supplies and confirm with an accountant or the CRA.
Which GST/HST rate do you charge?
In most cases, the rate depends on where your customer is located, not where you live. If your checkout collects billing address, province, or other location evidence, that information helps determine the applicable rate.
- Ontario: 13% HST
- Nova Scotia, New Brunswick, PEI, Newfoundland and Labrador: 15% HST
- Alberta, Yukon, Northwest Territories, Nunavut: 5% GST
- BC, Saskatchewan, Manitoba, and Quebec: 5% GST, with separate provincial tax rules to check
If you invoice clients manually for digital work, make sure your invoice shows the right tax amount and your GST/HST registration number. Our guide to invoicing with HST as a Canadian freelancer covers the invoice details.
What about customers outside Canada?
Sales to non-resident customers can often be zero-rated, meaning you charge 0% GST/HST but the revenue may still be a taxable supply for threshold purposes. This is common for Canadian creators selling digital downloads or software to US customers. Keep records showing the customer is outside Canada, such as billing address, account country, IP evidence, or platform reports.
Do not mix up zero-rated and exempt. Zero-rated sales can still count toward the $30,000 threshold and may still allow input tax credits. Exempt sales usually do not count and usually do not allow input tax credits.
What if a marketplace collects tax for you?
Many platforms now collect Canadian sales tax in some situations, especially where marketplace facilitator rules apply. But the details vary by platform, product type, customer location, and whether you are already GST/HST registered.
Practically, you should download your platform tax reports monthly and separate three things: gross sales, tax collected by the platform, and tax you collected directly. If you sell on multiple platforms plus your own website, your threshold tracking should include all taxable supplies, not just one storefront.
The bottom line
- Most digital products sold to Canadian customers are taxable
- Taxable digital sales usually count toward the $30,000 threshold
- Charge the GST/HST rate based on the customer's province
- Foreign customer sales may be zero-rated, but still need records
- Marketplace tax collection does not replace your own record-keeping
If digital product revenue is growing, track it before you hit the threshold. HST Hero shows your rolling GST/HST position so you know when registration is coming and can update your checkout before tax becomes an expensive surprise.