Marketplace Tax Collection for Canada FAQ
What is happening?
Amazon may be required to apply Canadian Federal & Provincial Marketplace Facilitator tax collection requirements (referred to as Marketplace Tax Collection or “MTC” by Amazon) to products you sell on Amazon.ca, based on rules specific to the product delivery destination’s tax authority.
Some variables of when MTC will or will not apply to your products include the store, and/or where a product/order is shipped from/to and/or tax registration(s) you’ve provided to Amazon (such as participation in Tax Calculation Service (TCS) and on your VAT Information page).
The information below includes answers to common questions related to MTC, including definitions, when and how MTC may apply to your products/orders, and how to identify MTC taxes throughout your account reporting.
Marketplace Tax Collection definitions
What is a Marketplace Facilitator (MPF)?
MPF is commonly defined as a business who contracts with third-party sellers to “facilitate” the sale of physical property, digital goods and/or services owned and supplied by a third-party through an online store or “marketplace.” Based on this definition, Amazon is a Marketplace Facilitator.
What is Marketplace Tax Collection (MTC)?
MTC is a common term Amazon uses for Marketplace Facilitator laws that identify the MPF as the party responsible for collecting and remitting sales tax on products shipped to buyers in those jurisdictions (federal and provincial levels) that have enacted such laws.
What is the difference between Marketplace Tax Collection (MTC) and Tax Calculation Services (TCS)?
MTC: Amazon is responsible for calculating, collecting, remitting and refunding supported sales taxes. Amazon (as the taxpayer/MPF) will remit MTC taxes collected from the buyer directly to the appropriate tax authority, according to the applicable legislation.
TCS: A service available to professional sellers on Amazon.ca to assist with their obligation to calculate sales taxes on products that they ship to a customer within Canada. Taxes calculated using TCS are collected from the customer and disbursed to the seller for the seller to report and remit to the appropriate tax authority.
What are the Canadian tax types Amazon may calculate?
Current Canadian tax definitions and rates are available in the Federal and provincial sales taxes section of the Canada tax and regulatory considerations page.
Marketplace Tax Collection information
Which Canadian jurisdictions have Marketplace Tax Collection (MTC) rules and when do those rules apply?
| Jurisdiction | Tax Name | Effective date | MTC applies when |
|---|---|---|---|
| Canada Federal | Canadian Federal Goods & Services Tax / Harmonized Sales Tax (GST/HST) | July 1, 2021 |
|
| British Columbia | British Columbia Sales Tax (BC PST) | N/A |
|
| Manitoba | Manitoba Retail Sales Tax (MB RST) | December 1, 2021 |
|
| Saskatchewan | Saskatchewan Provincial Sales Tax (SK PST) | July 1, 2021 |
|
| Quebec | Quebec Sales Tax (QST) | November 1, 2021 |
|
How does Amazon determine if an item I sell is subject to Marektplace Tax Collection (MTC)?
Amazon uses the product category and item description provided or selected when creating a product listing to determine if MTC sales taxes apply to the product you sell.
Who is responsible for sales taxes not calculated under Marketplace Tax Collection (MTC) or before MTC was effective?
Sellers are responsible for their tax calculation, collection and remittance obligations on sales of products to a buyer in a non-MTC jurisdiction or before MTC was effective, or are not calculated due to your tax registration(s) or misconfigured tax settings.
You may continue to have a reporting obligation to a tax authority for MTC sales taxes Amazon calculates, collects and remits on your product sales.
Who is responsible for Marketplace Tax Collection (MTC) reporting, remitting and/or filing with a tax authority?
Amazon will remit MTC taxes according to each tax authority legislation, as the taxpayer/MPF. You do not need to remit taxes Amazon has calculated, collected, and remitted and identified as MTC in your payments reporting. (See “Seller account reporting information” below).
Amazon is only responsible for sales taxes under MTC law. Amazon is not responsible for filing other taxes on your behalf, including any regulatory fees, income or other taxes that may be due on your sales.
If you have double remitted MTC sales taxes from your Amazon orders, you must work with your tax advisor and/or the tax authority to determine your refund options.
If my business is located outside of Canada or I ship products from outside of Canada, does Marketplace Tax Collection (MTC) apply to my products?
Yes, MTC rules are subject to the tax rules and legislation where the buyer is located. Go to the Marketplace Tax Collection information section above for more information.
If Amazon determines it has an obligation to calculate, collect and remit taxes on your products, MTC amounts collected from the buyer will be shown with your payments reporting.
Seller account settings changes
Do I need to change any of my seller account settings for Marketplace Tax Collection (MTC)?
Typically, you do not need to take action in your seller account for MTC. If you use Tax Calculation Service, your existing tax calculation settings will not apply when MTC does.
Seller Central payment reporting will automatically reflect Amazon’s responsibility when MTC applies.
Sellers may continue to have a responsibility for sales taxes on sales of products to a buyer in an MTC jurisdiction depending on their tax registration status with that jurisdiction and/or for taxes that are not supported by our service.
I believe Amazon got Marketplace Tax Collection (MTC) taxability wrong. How do I fix this?
Amazon uses your account tax registrations, Tax Calculation Service configurations, listing detail and category information to determine if MTC applies and the taxability of your product when MTC does apply. An unexpected product taxability behaviour may occur if your account information or product listing(s) are not up to date.
We recommend you regularly review and update the following information in your account settings:
- Your business information, including your business address.
- If you have a Canada GST/HST and/or Quebec QST registration number, make sure it is provided or up to date on your VAT information page for services that Amazon sells to you.
- If you use Tax Calculation Service to calculate tax on products you sell to buyers, review your settings and verify that your registration number(s) are up to date.
- Review your product category and item description for accuracy.
Can I edit my tax calculation settings for a jurisdiction with Marketplace Tax Collection (MTC)?
Your options to calculate taxes in a specific jurisdiction will be reflected in your Tax settings.
For example, you will not be able to edit MTC only jurisdictions (such as Saskatchewan or Manitoba). However, you are able to configure Canada GST/HST, British Columbia PST and Quebec QST.
Seller account reporting information
Will I receive regular statements of Marketplace Tax Collection amounts?
Yes, your payments reporting is a “statement.”
How do I identify Marketplace Tax Collection (MTC) amounts in my reporting?
Once an order with MTC is finalized, any MTC tax or regulatory fee amounts Amazon remits will be represented in your order detail pages and downloadable payments reporting. Reports may use various attributes; however, the following applies:
- Amazon’s MTC responsibility is represented as “Marketplace Facilitator” or “Amazon”
- Amazon MTC plus a sellers TCS responsibility on a single order is represented as combined MTC+TCS
- MTC amounts deducted from an order are represented as “Marketplace Withheld Tax,” “Marketplace Facilitator Tax,” and/or “Marketplace Facilitator Regulatory Fee.”
Additionally, professional sellers have access to jurisdictional tax rates and totals in their Marketplace Tax Collection report. Select this report when generating a sales tax report in the Tax Document Library. Go to Sales tax information in seller reports for other tax report types and information.
Any remaining tax amount (if any) not deducted for MTC is disbursed to you with your normal order earnings for you to remit to the appropriate tax authority.
What are my reporting options?
Seller Central has many reporting options; navigate to Reports > Payments to get started.
Other help pages: Payments frequently asked questions, FBA Business Report.
How does Amazon Tax Exemption Program (ATEP) apply to Marketplace Tax Collection (MTC)?
Amazon may accept an ATEP-enrolled buyer exemption for applicable MTC jurisdictions. The related exemption document will not be available to download when MTC applies.
Your tax settings ATEP enrolment selection and associated exemption document availability will continue to apply on non-MTC transactions where your tax settings are used. For additional information, see How ATEP Works.
Does the Tax Collection Service (TCS) fee apply to Marketplace Tax Collection (MTC)?
No, Amazon does not apply the sales tax collection fee on the MTC portion of a tax calculation.
Tax calculations on products sold to buyers in non-MTC jurisdictions will use your configured tax settings and any applicable service fee will apply to those calculations.
Can I opt out of Marketplace Tax Collection?
No, there is no option to opt out.
Can I prevent Amazon from shipping to jurisdictions with Marketplace Tax Collection?
No, there is no option to restrict sales to specific destinations supported by the Amazon store for tax reasons.
Who handles a buyer tax-only refund request on orders?
Sellers are responsible for answering buyer tax-only refund requests on:
- Seller-fulfilled orders when your Tax settingswere used to calculate taxes.
- Go to the Manage refunds page for additional information.
Amazon Customer Service will answer buyer tax-only refund requests on:
- Tax calculations by Amazon under Marketplace Tax Collection rules, and
- All Fulfilment by Amazon (FBA) orders, regardless of tax-responsible party.
