If you sell on Amazon Canada and you are GST/HST registered, the input tax credit (ITC) is the most valuable line on your return. It is also the line most often left half-empty. The GST you pay on Amazon seller fees, advertising, freight, customs, software, and Canadian professional services is recoverable, every penny of it, as long as you have the documentation and you put the right number in the right box. For a typical Amazon FBA seller, ITC recovery in the early years exceeds the GST collected and remitted on direct sales, putting you in a net refund position with CRA.
This is the part most Amazon sellers do not optimize. This guide walks through what qualifies as an ITC, what does not, how the four-year lookback works for sellers who register late, and the worked numbers on a typical year of Amazon Canada selling.
The short answer
An input tax credit (ITC) is the GST or HST you paid on a business purchase, claimed back on your GST/HST return to offset the GST or HST you collected on sales. As a registered Amazon Canada seller, you can recover the GST/HST on Amazon seller fees, FBA fees, advertising spend, inbound freight, customs (if you are the importer of record), Canadian software subscriptions, professional fees, and most other Canadian business inputs. The recovery is claimed on your GST/HST return and reduces the net tax you remit. For most Amazon FBA sellers, total ITCs in the first few years of trading exceed the GST collected on Canadian sales, producing a net refund.
What is an input tax credit?
GST/HST is a value-added tax. You collect it from your customers on the sales side, and you pay it on your business purchases on the cost side. The mechanism that prevents tax-on-tax cascading is the ITC: you net the GST you collected against the GST you paid, and you remit (or get refunded) only the difference.
If the collected side is bigger, you remit the difference to CRA. If the ITC side is bigger, CRA refunds you the difference. The second case is the normal one for Amazon Canada sellers in the early years and for non-resident sellers across the board, because the GST embedded in Amazon’s fees, advertising, and inbound costs is substantial.
What qualifies as an ITC for Amazon Canada sellers
Any GST/HST you pay on a Canadian business input qualifies, as long as four conditions are met:
- You are GST/HST registered at the time of the purchase (or you fall within the lookback window, covered below).
- The purchase is for use in your commercial activity (in your case, selling on Amazon Canada).
- The supplier charged GST/HST on the invoice and is themselves registered.
- You hold proper documentation: an invoice or receipt showing the supplier’s name, business number / GST/HST registration number, the GST/HST charged, and the date.
For an active Amazon FBA Canada seller, the typical ITC pool looks like this:
| Cost | GST/HST charged? | Claim as ITC? |
|---|---|---|
| Amazon referral fees | Yes | Yes |
| Amazon FBA fees (pick, pack, ship, storage, removal) | Yes | Yes |
| Amazon monthly Professional Selling subscription | Yes | Yes |
| Amazon Connect / Sponsored Products / Sponsored Brands advertising | Yes | Yes |
| Inbound freight, brokerage, customs (when YOU are the importer of record) | Yes | Yes |
| Import GST collected at the border by CBSA (when YOU are IOR) | Yes | Yes |
| Inbound freight or customs under DDP (forwarder is IOR) | Yes (paid by forwarder) | No (ITC follows the IOR, not you) |
| Canadian software subscriptions (Helium 10 Canada, Taxomate, A2X, QuickBooks Online, etc.) | Yes | Yes |
| Canadian legal, accounting, bookkeeping fees | Yes | Yes |
| Canadian translation and localization services | Yes | Yes |
| Office supplies, computer hardware, printer cartridges bought in Canada | Yes | Yes |
| Cell phone bill, internet, electricity (business portion only) | Yes | Yes, on the business portion |
| Vehicle expenses (business portion) | Yes | Yes, on the business portion, with documentation |
What does NOT qualify as an ITC
| Cost | Why ITC is not available |
|---|---|
| Purchases made before you were a GST/HST registrant (older than 4 years) | Outside the lookback window |
| Personal-use items | Not used in commercial activity |
| Goods exported (sold to a customer outside Canada) | The sale is zero-rated; you collect no GST so there is no need to offset, but you still claim ITCs on the costs of producing the exported goods |
| Supplier invoice missing GST/HST registration number | Documentation requirement not met; CRA can disallow at audit |
| Membership dues to a club that is mainly for dining, recreation, or sporting | Specifically disallowed by ETA |
| Meals and entertainment | ITC is limited to 50%, mirroring the income-tax deduction limit |
| Cost incurred outside Canada with no Canadian GST (eg. ad spend invoiced from Amazon US) | No Canadian GST was charged, so nothing to recover |
| GST that Amazon already remitted on a NARF order (Amazon was the seller of record) | Not your sale; not your tax to remit or recover |
Two of these deserve a closer look because they trip sellers up most often: the documentation requirement and the meals-and-entertainment 50% rule.
Documentation requirement
CRA requires three pieces of information on the supplier’s invoice to support an ITC claim of more than $30:
- Supplier’s name (and trade name if different)
- Supplier’s GST/HST registration number (the 9-digit business number plus the RT suffix)
- The GST/HST amount charged (or the rate and the amount of the supply)
For invoices over $150, two more elements: the recipient’s name and a description of the supply. Amazon’s monthly seller statements satisfy all of these as long as you download the proper tax invoice (not just the summary). If you cannot find the GST registration number on a supplier’s invoice, the ITC is at risk if CRA audits.
Meals and entertainment
The ITC on a $113 dinner with a Canadian client is not $13 of GST; it is $6.50 (50% of the GST charged), because income-tax law limits meals and entertainment deductions to 50% and ITCs follow the same limit. Many bookkeepers miss this and the difference compounds.
The 4-year lookback for sellers who register late
The single most underused part of the ITC system: when you register for GST/HST, you can claim ITCs on Canadian business inputs going back up to four years from the date of registration, provided you have proper documentation. This applies whether you are a Canadian resident or a non-resident, and it can be a meaningful one-time recovery for sellers who traded for years without registering.
If you have been operating for two or three years on Amazon Canada, paying GST on every fee and ad invoice and never claiming any of it back, the moment you register that backlog opens up. Multiply your typical monthly Amazon-and-ad GST by 24 to 36 months and the lookback recovery is often a meaningful five-figure number that comes back as a cheque on your first GST/HST return after registration. Many non-resident sellers we onboard get most of their first-year JCCA fees covered by the lookback recovery alone.
To claim the lookback, you need original invoices for the four-year period, organized by supplier and by month, with the GST registration number visible on each one. We pull and organize these for non-resident clients as part of our Non-Resident GST/HST service.
Claiming ITCs is easy. Claiming the right amount is not
The return itself is a handful of numbers. What determines whether those numbers survive a CRA review is everything behind them: whether each claimed ITC is supported by an invoice that meets the documentation rules, whether the GST on Amazon’s fee invoices and the CARM import statements was extracted correctly, whether anything non-creditable slipped in, and whether the period cutoffs match Amazon’s settlement dates. An inflated claim invites reassessment with penalties; a timid claim quietly donates your margin to CRA every filing period. Both failure modes are common, and both come from the bookkeeping, not the form. For our clients, every Canadian GST-bearing invoice flows through the books into a fully documented ITC claim each period, so the refund position holds up if CRA ever looks.
Worked example: a registered Amazon FBA seller’s annual ITC math
A registered Canadian Amazon FBA seller, $250,000 in Canadian sales
A Canadian-resident seller does $250,000 of Amazon Canada sales over 12 months. They are GST/HST registered and have entered their number in Seller Central. They handle their own customs as IOR.
| Item | Amount | GST/HST ($) |
|---|---|---|
| GST/HST collected on Canadian sales (weighted avg ~11% across provinces) | $250,000 | $27,500 |
| Amazon referral + FBA fees (avg 28% of revenue, GST avg ~13%) | $70,000 in fees | $9,100 |
| Amazon Sponsored Products advertising | $20,000 | $2,600 |
| Inbound freight + customs brokerage | $8,000 | $1,040 |
| Import GST collected at the border | n/a | $5,500 |
| Software (Taxomate, QuickBooks Online, etc.) | $2,400 | $312 |
| Accounting and professional fees | $6,000 | $780 |
| Total ITCs | $19,332 | |
| Net tax (collected minus ITCs) | $8,168 remitted to CRA |
Without the ITC claim, this seller would remit the full $27,500. With the ITC claim, the remittance is $8,168. That is $19,332 of recovered GST every year, which is real cash, not a paper credit.
The five ITC mistakes we catch most often in cleanup work
Every one of these comes up in client cleanups we have done for sellers who tried to handle GST/HST themselves or relied on a generalist bookkeeper. Each one leaves real recoverable GST on the table.
- Not pulling Amazon’s GST/HST seller tax invoices. Amazon issues monthly tax invoices that show the GST it charged on referral and FBA fees. Many sellers download the summary report instead, which does not break out the GST. Without the proper invoice, the ITC is unsupported.
- Missing the import GST on the CARM statement. Each month CBSA bills duty and import GST through CARM. The GST line is recoverable. We see sellers reconcile the duty into landed cost (correct) and accidentally also reconcile the GST into landed cost (wrong), losing the ITC entirely.
- Not claiming the four-year lookback after late registration. Sellers who finally register often start claiming ITCs from the date of registration forward and forget that the prior four years are also recoverable with documentation.
- Claiming ITCs on Amazon US fees that have no Canadian GST. Amazon US ad spend and US-side seller fees are invoiced from Amazon US, no Canadian GST is charged, so no ITC is available. Treating these as Canadian-GST-bearing is a common audit catch.
- Including marketplace-collected provincial tax (Marketplace Collected Tax / Amazon obligated tax withheld) in the GST/HST return. Those line items cover PST or QST that Amazon already remitted to BC, SK, MB, or QC directly. They are not yours to report on your CRA return or your provincial return.
Frequently asked questions
What is an input tax credit and who can claim one?
An input tax credit is the GST or HST you paid on a Canadian business purchase, claimed back on your GST/HST return to offset the GST or HST you collected on sales. Any GST/HST-registered business in commercial activity in Canada can claim ITCs on its qualifying business inputs, including Canadian-resident and non-resident Amazon sellers.
What Amazon-related costs are recoverable as ITCs?
Amazon referral fees, FBA fees (pick, pack, ship, storage, removal), the monthly Professional Selling subscription, Amazon advertising spend (Sponsored Products, Brands, Display), inbound freight when you are the importer of record, customs brokerage, import GST collected at the border by CBSA, Canadian software subscriptions, Canadian professional fees, and most other Canadian business inputs where the supplier charged GST/HST.
Can I claim ITCs on GST I paid before I was registered?
Yes, up to four years before the date of registration, provided you have proper documentation showing the supplier’s GST/HST registration number and the GST/HST amount charged. This is the four-year lookback and it is the single most underused part of the ITC system for sellers who register late.
What documentation does CRA need to support an ITC claim?
For purchases over $30, the supplier’s name, GST/HST registration number, and the GST/HST amount charged. For purchases over $150, also the recipient’s name and a description of the supply. Amazon’s monthly seller tax invoices satisfy these requirements as long as you download the proper invoice, not just the summary report.
What is line 108 on the GST/HST return?
Line 108 is the input tax credit line on the GST/HST return: the total recoverable GST/HST a registered business is claiming back for the period. When that claim is larger than the tax collected on sales, CRA refunds the difference, which is the normal position for Amazon sellers early on. Whether the number is right, and whether it survives a review, depends entirely on the documentation behind it, which is the part we build for clients.
Why am I in a net refund position with CRA?
Because the GST embedded in your business costs (Amazon fees, ads, freight, customs, software) is larger than the GST you collected on your Canadian sales. This is the normal state for Amazon Canada sellers in the early years of trading and for non-resident sellers across the board.
Can I claim the import GST as an ITC if my supplier ships DDP?
No. Under DDP, the freight forwarder is the importer of record on the CBSA entry and the import GST is billed to their CARM account, not yours. ITCs follow the IOR. To recover the import GST, you need to be the IOR on your own CARM account. Full discussion in our DDP shipping guide.
Can I claim ITCs on Amazon US fees?
Generally no, because Amazon US invoices its US-based fees without charging Canadian GST. No Canadian GST was charged, so there is no ITC to recover. Only the Amazon.ca side of your fees (and the US-side fees on Amazon Canada services) typically carry Canadian GST.
What to do next
If you are a registered Amazon Canada seller and you are not maximizing your ITC claim, you are leaving cash on the table every quarter. The most common cause is bookkeeping that does not properly break out the GST on Amazon’s tax invoices, the CARM statements, and the ad-spend invoices. We do this end-to-end for our e-commerce bookkeeping clients: every Canadian GST-bearing invoice flows into a clean, fully documented ITC claim each filing period.
If you are not yet registered and you are above (or close to) the $30,000 threshold, the lookback recovery alone is usually a strong reason to register sooner rather than later. Get in touch with a short note about your monthly Amazon volume, whether you are Canadian-resident or non-resident, and whether you have a GST/HST number yet. We respond within one business day with a fixed-fee quote covering the registration, the lookback recovery, and the ongoing filings. Pricing on our pricing page.
Related reading from our blog:
- Does Amazon Collect and Remit GST/HST for Sellers on Amazon Canada? (2026)
- Amazon FBA Canada GST/HST for Non-Resident Sellers: When to Register and Why
- Customs Clearance for Amazon Canada Sellers: How It Works and How to Recover the GST
- DDP Shipping for Amazon FBA Canada: Why Cheap Quotes Are Usually Built on Under-Declaration
- GST Input Tax Credits on Freight Forwarding for Amazon Sellers
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