The Cost Of Having An Online Business in Canada For Expats

Establishing an online business in Canada is probably one of the most accessible sources of livelihood that you can have.

This is compared to looking for certain jobs, attaining their respective qualifications, or fully building a physical business. The latter, most especially, will drain you out of your time, effort, and money if you’re a newcomer expat.

Hence, it brings us back to the ease of majoring in e-commerce. Keep in mind, though, that even if it’s relatively easier, it still comes with costs. This is aside from the startup investments that you will make. In particular, you will be subject to various taxes. It will also serve as your maintenance in order to continue providing products and services in Canada.

Here are the specific things that you will need to know:

#1: Sales Taxes

The first tax regulation that you’ll need to pay for your online business points to the sales tax. This is only if you are:

  • Eligible to run business in Canada
  • Selling taxable supplies
  • Not a supplier to small businesses

A sales tax is usually a percentage that you charge your customers for every product or service sold. However, it will still boil down to you paying the sales tax to the government.

There are three types of sales tax that you have to be mindful of. The first one is the regular sales tax collected from your customers, the provincial state tax, and the federal-state tax. All of these have certain rates depending on your business.

The fees are due periodically, but a certain time will depend on how much sales tax you collect.

Specifically:

  • Sales tax worth $1.5M or less – Will be due annually
  • $1.5M to $6M – Quarterly
  • Above $6M – Monthly

Filing, however, is done annually, no matter the amount.

On a more important note, sales taxes will only be levied in certain Canadian states. Some charge only the federal state tax, while some add the provincial state tax on top of it.

#2: Income Tax

Next up, you have to consider the income tax that will be implicated in your business. You will be qualified for this if you:

  • Incorporated your business in Canada
  • Live in Canada (Suppose that you’re the only owner)
  • Have a physical store for your business in Canada

If you’re sticking only to online business platforms, then you won’t have to mind this. If you fit the standards above, however, then proceed to the following sections.

The income tax is basically what you will pay for from the earnings that you got while running your business in Canada. The specific percentage will depend on the type of business you run and how much you earn in a year.

Since this is tied to several legal rules, it’s best to contact a lawyer for a more detailed explanation of costs.

Is Having An Online Business In Canada Worth It?

The question as to whether running an online business in Canada will be worth it, or not will depend on how long you plan on staying in Canada. If you will be a resident there for good, then it will definitely be worth it. This is because of the large customer base that you will be dealing with inside the country.

Not only that, but the country is also doing excellently in terms of economy. In fact, it was labeled as the ninth-largest economy globally in 2020. The title stays the same in 2021.

E-commerce sellers also have a lot of opportunities in Canada, which is probably why it’s one of the goals of many online brands.

Summary

Note that this article can’t come up with the specific costs that you have to pay. This is because there are a lot of variables that you need to keep in check. For instance, you have to depend on the kinds of products and/or services that you sell, how much your annual income is, and the specific state you’re based in.

If you prefer getting a full overview on fees, then we recommend going to total.law. They have professionals that specifically major in immigration and other matters, to say the least. Consulting with them and availing of their service will help you run your online business more efficiently.

On another note, you shouldn’t consider skipping the said fees above. You can cut down on other operational costs except for the tax regulations. Having issues with this can lead to several legal matters, including the loss of your business license and registration.

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