Do I need a US LLC to sell to American customers?

Usually not. Americans can pay a Canadian sole proprietor directly, and a US LLC does not lower your Canadian tax, because as a Canadian resident you are taxed on your worldwide income. It can raise it: Canada generally treats a US LLC as a corporation while the US looks through a one-owner LLC to the owner, and that mismatch can tax the same profit in both countries without the usual foreign tax credit. If you are a US citizen, keep inventory in the US, or work in the US for much of the year, talk to a cross-border accountant before forming anything.

Do I charge GST/HST to US clients?

No. Services you perform from Canada for clients outside Canada are generally zero-rated exports, so you charge 0%. The same goes for goods you ship to a US address and, in most cases, digital products sold to buyers outside Canada. The exceptions include work on property located in Canada and services to someone while they are in Canada.

Do US sales count toward the $30,000 GST/HST threshold?

Yes. The CRA counts your worldwide taxable supplies, and zero-rated exports are taxable supplies at 0%. So US$20,000 of US work (about $27,956 at the Bank of Canada's 2025 average) plus $5,000 of Canadian sales puts you over $30,000, even though only the $5,000 is taxed.

Should I fill out a W-8BEN or a W-9?

A Canadian resident who is not a US citizen or green card holder gives a W-8BEN. It is the form for individuals, and a sole proprietorship is you, so it is the right one. The W-8BEN-E is for corporations and other entities, and the W-9 is for US persons. Line 6a asks for your foreign tax identifying number, which for a Canadian individual is your SIN.

Will the US tax the money my American clients pay me?

Not for work you do from Canada. Pay for services performed in Canada is not US-source income, and the Canada-US tax treaty only lets the US tax a Canadian business's profits when it has a permanent establishment in the US. Work you physically do in the US is different: services can create a permanent establishment after 183 days in the US in a 12-month period if most of your revenue comes from that work.

How do I convert US dollar income for my tax return?

Report it in Canadian dollars. The CRA accepts the Bank of Canada exchange rate for the day you were paid, or the annual average rate when you were paid at various times through the year. Use one method consistently.

Selling to US Clients from Canada (2026): GST/HST, W-8BEN, US LLC

Do Canadians need a US LLC?

Usually not. An American business can hire and pay a Canadian sole proprietor directly, and the big freelance and selling platforms pay Canadian sellers too. Nothing about having US customers requires a US company.

The bigger problem is tax. As a Canadian resident you pay Canadian tax on your worldwide income, so a US LLC does not move your income out of Canada's reach. Worse, the two countries see the LLC differently. The US looks through a one-owner LLC to you, while Canada generally treats it as a corporation. That mismatch can leave the same profit taxed in both countries, without the foreign tax credit that normally stops that from happening. Many of the US LLC guides online are written for founders outside Canada, so they skip this.

There are real exceptions: you are a US citizen or green card holder, you keep inventory in a US warehouse, or you work in the US for much of the year. In those cases the answer depends on details, so talk to a cross-border accountant before you form anything.

Your US sales count toward the $30,000 GST/HST threshold

This is the one that catches people. You charge Americans 0% GST/HST, so it feels like those sales are outside the system. They are not. The CRA's small supplier test counts your worldwide taxable supplies, and a zero-rated export is a taxable supply taxed at 0%.

Example

A designer bills US$20,000 to US clients and $5,000 to Canadian ones in a year. At the Bank of Canada's 2025 average of 1.3978, the US work is about $27,956. Total: $32,956, over $30,000. They have to register, even though only the $5,000 of Canadian work will ever carry GST/HST.

The upside: once registered, you claim back the GST/HST you pay on business expenses (software, equipment, your phone plan and the like) while collecting little or nothing on export sales. For a business that sells mostly to the US, the return can end in a refund. That is also why some people under the threshold register voluntarily. The test runs on calendar quarters, and once you stop qualifying as a small supplier you have 29 days to register. Our guide on when to register for GST/HST walks through the dates.

Source: CRA RC4022, General Information for GST/HST Registrants

What to charge Americans: 0% GST/HST

Services you perform from Canada for a client outside Canada are generally zero-rated. The exceptions include work on property located in Canada and services to someone while they are in Canada.
Digital products (courses, ebooks, templates, software licences) sold to buyers outside Canada are generally zero-rated, unless the buyer is in Canada when they buy or the product can only be used in Canada.
Physical goods you ship to a US address by mail, courier or carrier are zero-rated. Keep the proof of shipment.

Put the client's US address on the invoice and mark the sale as a zero-rated export. Provincial sales tax and the US side have their own rules, covered in our place of supply guide.

Sources: CRA RC4022, General Information for GST/HST Registrants · CRA GST/HST Memorandum 4-5-3, Exports of Services and Intangible Personal Property

The W-8BEN, and why the US usually does not tax you

When a US client or platform asks for tax paperwork, a Canadian who is not a US citizen or green card holder gives a W-8BEN, not a W-9. The W-8BEN is the form for individuals, and a sole proprietorship is you. The W-8BEN-E is for corporations and other entities. Line 6a asks for your foreign tax identifying number, which for a Canadian individual is your SIN.

Pay for work you do in Canada is not US-source income, and the Canada-US tax treaty only lets the US tax a Canadian business's profits when it has a permanent establishment in the US. With the W-8BEN on file, your client should not withhold US tax. Work you physically do in the US is the exception: services can create a permanent establishment once you are in the US 183 days or more in a 12-month period and most of your revenue comes from that work. Keep a log of US workdays.

Sources: IRS Instructions for Form W-8BEN · Canada-US Tax Convention (Article V, Article VII)

US sales tax and shipping

Most US states do not tax most services, so a freelancer billing American businesses rarely has to think about US sales tax. Products are different. A state can make a remote seller collect its sales tax once sales into that state pass a threshold. Most states use US$100,000 a year and none use less, so a seller under US$100,000 of total US sales is under it everywhere. Marketplaces such as Amazon, Etsy and eBay collect and remit the tax on the sales they handle for you.

If you ship physical products, note that since August 29, 2025 the US no longer lets small commercial parcels in duty-free. Duties are assessed on every shipment, and Canada Post needs them prepaid before it accepts a US-bound business parcel. Ask your carrier how duties are charged and who pays them.

Sources: CBP: suspension of duty-free de minimis treatment · Canada Post: sending packages to the U.S.

Converting US dollars for your T2125

Report US income in Canadian dollars. The CRA accepts the Bank of Canada exchange rate for the day you were paid, or the annual average when you were paid at various times through the year. The Bank of Canada's 2025 average was 1.3978 Canadian dollars per US dollar. Pick one method and use it consistently. The converted figure goes on your T2125 and into your GST/HST threshold.

Sources: CRA Income Tax Folio S5-F4-C1, Income Tax Reporting Currency · Bank of Canada annual average exchange rates

Selling to the US from Canada

Selling to the US Checker