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
Types of exemptions
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 toSetting up Canadian taxes.
| Exemption | Description |
|---|---|
| First Nations status exemption | Applies to First Nations peoples of Canada that hold a validCertificate 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. |
| Diplomat exemption | Applies toCanadian diplomatsinManitoba(GST, RST) andNova Scotia(HST). Exemptions differ from province to province, so you should check with your provincial tax agency for more details. |
| Reseller exemption | Applies to buyers that purchase goods for resale or lease inBritish Columbia(PST),Manitoba(RST), andSaskatchewan(PST). |
| Commercial fishery exemption | Applies to buyers that purchase goods for use in commercial fishing inBritish Columbia(PST),Manitoba(RST),Nova Scotia(HST),Prince Edward Island(HST), andSaskatchewan(PST). |
| Production machinery exemption | Applies to buyers that purchase production machinery inBritish Columbia(PST) andSaskatchewan(PST). |
| Contractor exemption | Applies to contractors inBritish Columbia(PST) andSaskatchewan(PST). |
| Subcontractor exemption | Applies to subcontractors inBritish Columbia(PST) andSaskatchewan(PST). |
| Purchase exemption | Applies to vehicle purchases inOntario(RST). |
| Farmer exemption | Applies to purchases of farming equipment inManitoba(RST),Nova Scotia(HST), andSaskatchewan(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 tax exemption
To learn more about available tax exemptions, refer toTypes of exemptions.
- From your Shopify admin, go toCustomersand select a customer.
- ClickManagein theTAX SETTINGSsection.
- Select the tax exemption that you'd like to set for your customer.
It's important to note that verifying that your customers are eligible for these exemptions is your responsibility. It's not possible to verify this using the Shopify admin.
Tax exemptions on POS
Any tax exemptions you've set up are applied when using the Shopify POS app, though they're displayed differently depending on the device you use.
- 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 theChargebutton. After you tap the button, a prompt indicating the new price is displayed.