“Carrying on Business in Canada”: The Test That Decides Non-Resident GST

Before the 2021 digital rules existed, this phrase was the whole game — and for goods sellers it still is. Whether a non-resident is “carrying on business in Canada” decides whether the traditional registration rules apply. It's a factor test, not a bright line. Here's how it's weighed.

Why it matters

A non-resident carrying on business in Canada and making taxable supplies here falls under the standard registration rules — the same ones Canadian businesses follow — independent of the digital-economy thresholds. Two doors into the system: this presence test, and the 2021 economic rules. You only need to walk through one.

The factors the CRA weighs

•     Where goods are delivered, and where inventory is stored (a Canadian warehouse is heavy weight)

•     Where contracts are made and payments received

•     Where employees, agents, or solicitation activity are located

•     Where services are performed and where the operations' decisions happen

No single factor decides it — but inventory in Canada plus active solicitation of Canadian customers is the classic combination that tips the scale.

The patterns that usually qualify

FBA and 3PL sellers with stock in Canadian fulfillment centres; sellers delivering duty-paid into Canada as importer of record; businesses with Canadian sales agents. The pattern that usually doesn't: pure export sales, shipped from abroad, customer as importer, no Canadian footprint.

Presence vs economic nexus — the full picture

This test is the “physical” half of the framework in our nexus guide; the $30,000 digital-economy rules are the “economic” half. Goods sellers tend to get caught by presence first; digital sellers by economics. Plan for whichever bites earlier.

Get a determination, not a guess

The factor test rewards actual analysis. BluTax reviews your supply chain against the factors and documents the conclusion — so your registration position is a file, not a hope.

Frequently asked questions

What does carrying on business in Canada mean for GST?

A multi-factor test (inventory, delivery, contracts, solicitation, people) that determines whether a non-resident falls under the standard registration rules — separate from the $30,000 digital-economy threshold.

Does a Canadian warehouse mean I'm carrying on business in Canada?

It's one of the heaviest factors — combined with selling to Canadians, it very commonly tips the test.

This page provides general information about Canadian sales tax and is not tax advice. Rates and thresholds are current as of drafting; BluTax confirms the specifics for each client’s situation.