If you have seen the phrase “Amazon reserves the right to withhold or recover GST amounts” in Seller Central, it means exactly what it says: Amazon can pull GST or HST out of your disbursements if the tax information on your account turns out to be wrong. The GST credit notes in your Tax Document Library are the related paperwork, recording adjustments to tax Amazon previously charged you. Both trace back to the marketplace tax rules that took effect on July 1, 2021.
Why Amazon withholds GST on your sales in the first place
Since July 1, 2021, Canada’s marketplace rules have made Amazon responsible for collecting and remitting GST/HST on Amazon.ca sales made by sellers who have not provided a GST/HST registration number on their account. Amazon charges the buyer at checkout, keeps that tax out of your payout, and remits it directly to the CRA. In your seller reports it appears under labels like “Marketplace Withheld Tax” or “Amazon obligated tax withheld”.
That money was never yours. It came from the buyer and went to the government without touching your disbursement. It does not belong on your own GST/HST return, and remitting it again is a genuine double payment.
Once you provide a valid GST/HST registration number, the responsibility flips: you collect and remit the federal tax on your own sales. Provincial taxes in some provinces still run through Amazon regardless of your status, which is covered in our PST and QST guide below.
What “withhold or recover” actually means for your account
Amazon decides whether to collect tax on your sales based entirely on what you tell it, and the legislation backs that up. A marketplace that relied in good faith on a seller’s information is relieved of liability, and the seller who gave false or outdated information becomes liable for the uncollected tax, with joint and several liability on top.
Amazon’s agreement passes that risk straight back to you. If the CRA assesses Amazon for tax that went uncollected because of something on your account, Amazon can take the money out of your seller funds. Common triggers: a registration number entered incorrectly, a number cancelled after deregistration but never removed, or a registration that lapsed while Amazon still treated you as registered.
The recovery simply comes out of a future disbursement. The protection is boring but effective: register properly and update the number on your account the moment your status changes.
What Amazon GST credit notes are
Amazon charges GST/HST on the fees it bills you, including referral fees, FBA fulfillment charges, and advertising. The tax invoices sit in your Tax Document Library. When Amazon reverses or adjusts a fee, or corrects the tax after your account information changes, it issues a credit note recording tax flowing the other way.
For a registered seller, those documents drive your input tax credit claims. Tax invoices support the GST/HST you recover on Amazon fees. Credit notes reduce that claim. The trap is claiming ITCs from every invoice while ignoring the credit notes, which quietly overstates your refund position. When the CRA reviews the account, the overclaimed amounts come back with interest.
Where sellers actually lose money on this
Three patterns show up again and again in the Amazon seller files we take over. Sellers remit tax that Amazon already remitted because the withheld amounts were booked as their own collections. Sellers overclaim ITCs because credit notes never made it into the books. And sellers lose a disbursement to a recovery because the registration details on the account went stale years ago.
Each one is preventable and expensive to unwind. Reconciling what Amazon remitted, what you owe, and what you can claim back is exactly the work we do for Amazon sellers every filing period.
Frequently asked questions
Do I have to remit the GST Amazon withheld from my sales?
No. Tax shown as marketplace withheld was remitted by Amazon directly to the CRA. It should not appear on your own GST/HST return as tax you collected. Remitting it again means paying the same tax twice.
Why is Amazon still collecting GST when I am registered?
Amazon acts on the information in your account, not on CRA records. If your number is missing, entered incorrectly, or failed validation, Amazon treats you as unregistered and keeps collecting. You may still have your own filing obligations in the meantime.
What is an Amazon GST credit note?
It is a document recording a reversal or adjustment of GST/HST that Amazon previously charged, most often on seller fees. Credit notes reduce the input tax credits you are entitled to claim on those fees.
Can Amazon really take GST out of my payouts?
Yes. If the CRA holds Amazon liable for uncollected tax because of inaccurate information on your account, Amazon’s agreement lets it recover that amount from your seller funds.
Related guides
- Does Amazon Collect and Remit GST/HST for Sellers on Amazon Canada? (2026)
- Input Tax Credits for Amazon Canada Sellers: How to Recover the GST You Are Already Paying
- Does Amazon Collect and Remit PST and QST in Canada?
- Amazon FBA Canada GST/HST for Non-Resident Sellers: When to Register and Why
- GST/HST Registration and Filing Services
Not sure what Amazon has been doing with your GST?
We reconcile Amazon’s withheld tax, credit notes, and your GST/HST filings for e-commerce sellers, and we fix the registrations that cause claw-backs in the first place. Contact us and we will tell you where you stand.
Related guides
Get the tax side right the first time.
We work with e-commerce and owner-managed businesses across Canada and beyond: GST/HST and provincial sales tax, corporate structure, income splitting, and non-resident compliance. Tell us your situation and we will tell you exactly what you need.
Get in touch