E-commerce: what to consider when selling online in Canada

March 24, 2014 - Tags: E-business Sales

Planning to operate an e-commerce business? Did you know when selling online you'll need to comply with all provincial and territorial regulations where you are conducting business?

Even though you won't have a physical address in other provinces or territories, you should be aware of the requirements for selling to customers in those regions. Different parts of Canada may have different regulations for e-commerce, online sales contracts, advertising or terms and conditions of a sale.

Some of the regulations that apply to traditional businesses may also apply to your online business, such as registering your business name, copyrights and trademarks, privacy, product safety and exporting.

Be sure to look into the following:

  • Extra-provincial registration
    If you do business with clients outside the province or territory where you are registered, you may be required to register your business in their province or territory of residence as well.
  • Incorporation
    You may want to consult a professional to discuss the benefits of incorporating your online business either federally or provincially.
  • Consumer Protection Acts
    Each province and territory has its own consumer protection act, so be aware of this fact when selling to someone in another province. Find out if there are different requirements in that jurisdiction.
  • Terms and conditions for online sales
    Be as detailed and accurate as possible when setting out information regarding the terms and conditions of the sale, the price, shipping and delivery charges, method of payment, warranties, exchanges and refunds. Have your clients accept the terms and conditions to ensure they have read them. An Internet sales harmonization template is available to help you comply with some of the requirements for your Internet sales contract.
  • Taxes
    If you're selling to an out-of-province client, it's important to know how and when to charge sales taxes (GST, HST and PST). Ideally, your e-commerce platform should be set up to automatically add the correct amount of tax, but you should test to make sure it is up-to-date and verify that it is accurately set up.
  • Anti-spam laws
    Find out about obtaining consent before sending promotional material to your current or potential clients, how the unsubscribe function works or what you can and cannot do when conducting marketing activities.

Being aware of the requirements that apply to selling your product or service online may help you reduce the risk of disputes, liability, and cancellations that could happen with transactions across the country.

Learn more about e-business security, privacy and legal requirements.


Comments

Posted by Canada.ca on September 16, 2014
Hello Murtaza,

When running an ecommerce business, you are governed by the regulations of each country where you sell your goods. In the United States, you may find that the U.S. Small Business Administration offices will be able to assist you. You can contact them at 1-800-827-5722 or visit their website.

If you sell goods and services to international customers, you are not required to collect GST/HST or PST, provided they take delivery of the goods or services outside of Canada. For more information visit our page overview of charging and collecting sales tax.

Learn about permits, licences and regulations that may apply to your business.

You may also want to visit our exporting and importing page or call Canada Business toll free at 1-888-576-4444 (TTY 1-800-457-8466).

Best of luck with your business.
Posted by Murtaza on September 16, 2014
I thinking to do buying and selling computer parts through e bay and amazon in USA and Canada.which is called E business I guess. My question is when I have to charge GST. To my customers and do I have to apply import export license
Posted by Canada.ca on August 11, 2014
Hello Aileen,

You may want to contact the Canada Business service centre in your province or territory to find out about registering your business, as well as any permits or licences you may need. You can call us toll free at 1-888-576-4444 (TTY 1-800-457-8466). Find out more in our section on Registering your business, and in our section on Electronic commerce. You may also want to check out our Legal requirements for e-business section. Best of luck with your new business!
Posted by Aileen on August 8, 2014
Hi,

We were planning to put up a Online Reservation System (ORS), for accommodation, tours or activities. The site will offer rates for the chosen country or location within chosen country if its available in the sites inventory of Hotel Rooms, Tours & Activities. Available inventory will be connected to a third party website through XML and there will also be direct client and will depend on where is the location they wanted to avail. How will be our registration should be and how do we go about it?

Thank you.
Posted by Canada.ca on August 8, 2014
Hello Varun,
Congratulations on launching your one-on-one international tutoring site!
Regarding your first question, there can be a certain benefit to registering your business in each Province and Territory, and some actually require you to register as an extra-provincial business in order to conduct business locally. To register federally, you will need to go through each registry separately. Find out more from our page Registering your business.

To help decide which business structure is best for you, start with our page Corporation, partnership, or sole proprietorship where you will find brief overviews of these structures and more.

For GST/HST enquiries, please contact CRA directly or visit their page on on GST/HST.

For more information on starting or growing a business in Canada, contact us at 1-888-576-4444 (TTY 1-800-457-8466) or find find your local centre.
Posted by Varun on August 7, 2014
Hi,

I will be launching an e-commerce site that will offer live one-on-one tutoring (by registered tutors) to students around the globe via a video chat system. Since I will be having customers in all provinces, as well as in other countries, I wanted to know whether I should register my online business federally or provincially? Also, should I be incorporating or register as a sole proprietorship?

From my research I found that in Canada (and most countries) tutoring is exempt from GST/HST. Can you please confirm that I don't need to charge GST/HST to my customers for tutoring services offered online?

Thanks,

Varun
Posted by Canada.ca on July 31, 2014
Hello Nicole,

Being aware of regulations and complying with them is an important part of running a business. In addition to using the links in the blog, you can use our search tool to find the permits and licences required for your specific business situation. Requirements vary between municipalities as well as between provinces and territories. There are also different requirements depending on the nature of your business, if you'll have employees or not, your business structure and many other factors. You may want to also consult our section Regulations for specific business activities and filter our website by selecting the province or territory where you will be running your business. We also have a video that may help.

When running an ecommerce business, you are governed by the regulations of each country where you sell your goods. In the United States, you may find that the U.S. Small Business Administration offices will be able to assist you. You can contact them at 1-800-827-5722 or visit their website.
If you sell goods and services to international customers, you are not required to collect GST/HST or PST, provided they take delivery of the goods or services outside of Canada.

Visit our exporting page or call Canada Business toll free at 1-888-576-4444 (TTY 1-800-457-8466). If you are looking for more information on regulations and other aspects of starting or running your business, feel free to contact the Canada Business service centre in your region for further assistance.

Best of luck!
Posted by Nicole on July 30, 2014
Hello,

I'm currently in the process of starting an e-commerce site which sells decor and accessories via a drop ship method, to customers in Canada and the USA.

What information would I need in terms of licenses/permits/registrations in order to operate?

Thank you.
Posted by Canada.ca on June 23, 2014
Thank you for contacting Canada Business.

When running an ecommerce business, you are governed by the regulations of each country where you sell your goods. In the Unites States, you may find that the U.S. Small Business Administration offices will be able to assist you. You can contact them at 1-800-827-5722 or visit their website.

For regulations in Europe, you would have to contact the government offices responsible for business administration in each of the countries where you are selling your products.

You mention that your products are digital - is certification required for these products in Canada? If so, then they most likely need certification in other markets as well.

If you are selling software, such as computer games, that may contain restricted cryptographic technology, you should be made aware of the specific export permits that may be required.

If you sell goods and services to international customers, you are not required to collect GST/HST or PST, provided they take delivery of the goods or services outside of Canada. If international customers, such as tourists, make purchases within your province or territory, they are required to pay the GST/HST and PST. In some cases, they may be eligible to receive a GST/HST refund.

Visit our exporting page or call Canada Business Ontario toll free at 1-888-576-4444 (TTY 1-800-457-8466).

Best of luck with your business.
Posted by Dwayne on June 21, 2014
Hello, if I have a Ecommerce business and i sell digital products, since it's online would i have to look into the online regulations for each country or city that can potentially purchase from me, like for example since I'm in Ontario Canada and if a customer from the US purchases from me in let's say California, would i have to look into the laws of selling in California or let's say France etc..
Posted by Canada.ca on May 20, 2014
Hello Mat,

Before selling your books online, you may want to see our page on Online sales and also review our section on Starting a business.

For more information on starting or growing a business in Canada, contact us at 1-888-576-4444 (TTY 1-800-457-8466).

Good luck with your book sales!
Posted by Mat on May 17, 2014
I write and illustrate humor books and I would like to sell them online. I know nothing about starting an online business, can you help?

Thank You
Posted by Canada.ca on April 7, 2014
Hello Tayyab,

Please see our page 'Immigrating to or investing in Canada to start a business'. From there, you should be able to find the information and programs relating to your situation.

Good luck!
Posted by tayyab on April 5, 2014
Hi. Could you pleease help me. I am a programmer and I'm looking to make my own site like ebay or amazon but in different ways so if I register my site in ca so will I able to come and open my warehouse in ca and opertae from ca as well? If yes, so what is specs and how to start and which docs I need to provide you thanks.
Posted by Canada.ca on April 1, 2014
Hi Shane,

You can use our search tool to find Permits and Licences that apply to your situation and our page on Regulated business activities to spot the regulations which are most likely to concern you.

You may also want to become familiar with security and privacy issues specific to e-business and the basics to developing your web presence.

For more information, please contact the Canada Business Service centre in your area.

Good luck with your start-up!
Posted by Shane on March 30, 2014
Hello,

I was wondering since I was thinking about opening an online shop for accessories, I'm not looking into bringing containers worth of goods, I'm looking into getting simply a 100 of a certain earrings, necklaces, etc... and selling them through the website, thus sending them by parcels either by Canada Post or Fedex or a similar way... I was wondering what kind of regulations and restrictions I have to abide. Please note I'm a foreign student who is thinking about operating from the comfort of his own apartment!
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