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Billing US clients from your Canadian corporation: GST/HST, W-8BEN-E and US income tax

Work you perform in Canada for a US client is GST/HST zero-rated at 0%, still counts toward the $30,000 registration threshold, and usually means no US tax return.

By Matthew Reeves, FounderAugust 16, 2026 · 8 min read

Summary

Billing a company in the United States raises two questions that get asked together and have almost nothing to do with each other: whether you charge GST/HST, which is Canada’s sales tax on goods and services, and whether you owe US income tax. Here’s the answer for the common case, which is your Canadian corporation doing all the work from Canada for an American company that shares no owners with it.

  1. You charge GST/HST at a rate of 0%, so no tax appears on the invoice. Work you perform in Canada is a sale made in Canada, which puts it inside the sales tax system, and consulting or professional work sold to a customer who isn’t resident in Canada is then taxed at nil, not at the 5% to 15% a Canadian customer pays.
  2. You still have to register once your worldwide sales pass $30,000, measured over four consecutive calendar quarters or over any single quarter. A 0% sale is still a taxable sale in law, so it counts toward that $30,000 in full. Registering is also what lets you claim input tax credits, i.e. refunds of the GST/HST you pay on your own costs (e.g. rent and software).
  3. Ask each US client for a signed statement at onboarding confirming that it isn’t resident in Canada. If the 0% turns out to have been wrong, the Canada Revenue Agency (the CRA, the federal tax collector) bills you rather than your client.
  4. Usually you file nothing federally in the United States, because work performed in Canada isn’t income from a US source. Sign and return Form W-8BEN-E, the certificate of foreign status a US client’s accounts payable department asks for. The answer changes if someone works on US soil, if a client withholds US tax anyway, or if a US state asserts a claim.

In our view the right default is to register even while you’re under $30,000, and to elect quarterly filing so the refunds arrive four times a year. Invoice in US$ if the client expects it, accepting that you carry the currency movement between invoicing and payment.1 What flips the US half is people: if anyone from your corporation works while physically in the United States, US tax and a US return come into play.

GST/HST on an invoice to a US client

There are two steps. First, the sale is made in Canada. Under the Excise Tax Act, the federal statute holding the GST/HST rules, a service is supplied in Canada if it’s performed in whole or in part in Canada.2 Work you do at a desk in Toronto for a client in Ohio is a Canadian sale, whichever country pays you.

Second, the rate is 0% rather than the rate you’d charge a Canadian client. Schedule VI of the same Act lists everything taxed at 0%, and Part V of it covers exports. Advisory, consulting and professional services sold to a person who isn’t resident in Canada sit in that export list, whether or not that person is registered for GST/HST.3 Four kinds of work are carved out: a Canadian court case for an individual, work about land in Canada, work on goods sitting in Canada, and acting as your client’s agent. None of the four touches ordinary remote consulting.

A company isn’t resident in Canada if it’s incorporated outside Canada and isn’t run from here, meaning its real decisions get made abroad.4 Canadian customers and Canadian contractors don’t by themselves make an American company resident.

Two things break the 0%. The first is who signs, because your customer for sales tax purposes is whoever is legally liable to pay you under the agreement.5 If the engagement letter names the Canadian arm of your US client rather than the US company itself, your customer is Canadian and the invoice carries tax. The second is that client running its own fixed place of business here (e.g. an office or a staffed workshop), which Canadian law treats as resident for anything done through it.4 Work for that Canadian office carries tax, and work for the US head office doesn’t. Either way the invoice takes your customer’s provincial rate, which our registration guide sets out.

Zero-rating is your call rather than your client’s, and the CRA puts the burden of supporting it on you. Ask for a certification of non-residence, which the CRA publishes model wording for. An officer of the client company signs a short statement that it isn’t resident in Canada for Excise Tax Act purposes, and that it will tell you if that changes.6 One email at onboarding, filed with the contract, is what stands behind the 0%.

Registering for GST/HST

You have to register once your worldwide sales pass $30,000, on either of two windows: the last four consecutive calendar quarters, or any single quarter on its own.7 Our registration guide works through the deadlines that follow. The part specific to American billing is that a 0% sale is taxed rather than untaxed, just at a rate of nil, so it counts toward the $30,000 in full. A consultant whose clients are all American can be past the threshold having never collected a dollar of sales tax.

Registering early is worth it anyway. What it buys is the right to claim back the GST/HST on your own costs from the first purchase onward, while charging nothing on your sales. Say you spend $60,000 a year, before tax, on rent, software and subcontractors. In Ontario the 13% HST on that is $7,800, and registering means you claim all of it back, at your own province’s rate.8 What it costs is a return every reporting period, tax on any Canadian sales you take, and books good enough to stand behind every credit.

Because you charge no tax but claim credits on every cost, each return produces a refund rather than a payment. As such we’d file quarterly and collect the money four times a year. That takes an election, since the CRA assigns an annual reporting period on registration, and you change it on Form GST20 or through the “File an election” service in My Business Account.9 The larger sales thresholds that push other businesses into quarterly or monthly filing are measured with zero-rated exports left out, so they never reach an exporter.9 Note the mirror image: the same invoices count in full toward the $30,000 that makes you register, and nil toward the thresholds that set how often you file. Skip the GST/HST quick method too. It trades input tax credits for a flat remittance rate, and zero-rated sales are left out of its calculation.10

Form W-8BEN-E and US income tax

US withholding tax, meaning tax the payer deducts and sends to the US government before you see the money, applies to income from US sources at a flat 30% of the gross payment.11 For services, both countries decide which country income came from by asking where the work was physically done, rather than where the client sits or where the money is sent.12 A Canadian corporation whose people work from Canada therefore has no US-source income, no US withholding and no US federal return. A Canada-US tax treaty protects its trading profits from US tax as well, though you never need it unless someone actually works there.13

A US client will still ask you to sign Form W-8BEN-E, the certificate that your company is foreign rather than American. It goes to the client rather than to the IRS. It isn’t quite the two-minute job it looks like. Line 5 asks for a status under the US anti-offshore rules known as FATCA, and whichever box you tick there has a matching certification part further down the form that also has to be completed.14 Generally the form then runs from signature to the last day of the third succeeding calendar year, so one signed in 2026 lasts until December 31, 2029. If anything on it stops being true before that (e.g. your address or legal name), you have 30 days to tell the client.14 If accounts payable sends a Form W-9 instead, which is the US form for US persons, don’t sign it. Signing certifies under penalty of perjury that your company is American, which isn’t true.15

How often this changes

The GST/HST treatment of exported services has been stable for years and isn’t the part that moves. What changes is your own situation, and two changes deserve a standing calendar reminder:

  • Anyone from your corporation working on US soil. A US return can be required even for a short assignment, although the treaty may protect the profit from federal income tax.16 The treaty’s services test can allow US tax where one person spends at least 183 days there in twelve months and generates more than half the corporation’s operating revenue from that work. A second test counts 183 days of services on the same or connected projects for qualifying US customers, and a fixed place of business can qualify separately.17 Count rolling twelve-month periods, and have a US advisor check federal filing, treaty relief and state obligations before anyone starts work there.
  • Changing what you sell, or who owns you. Licence and subscription income runs on different rules and can attract US withholding tax with nobody leaving Canada. An owner who is a US citizen or green card holder matters more still, because it lets the United States tax that owner on the corporation’s income.

Otherwise, check at your year end that both are still true.

Closing thoughts

The cross-border part of billing American clients is smaller than it looks from the outside. A consultant working from Canada for American clients runs an ordinary Canadian business and files an ordinary Canadian return, and the only genuinely foreign thing about it is the currency on the invoice. The effort that pays for itself is unglamorous: registering, keeping a certification of non-residence with each contract, and counting days if anyone travels.

How we handle it

We register the corporation for GST/HST and elect the reporting period that gets your refunds soonest, rather than the annual period the CRA assigns, then file the returns with export sales reported and every credit claimed. We draft the certification of non-residence you send to new US clients, complete the W-8BEN-E when a client asks, and convert the year’s US dollar receipts at Bank of Canada rates for the T2, your corporation’s income tax return. Where US working days accumulate, we bring in a US advisor.

Footnotes

  1. Income Tax Act, section 261(2) and the definition of relevant spot rate in section 261(1), under which Canadian tax results are computed in Canadian currency and a foreign-currency amount is converted at the rate quoted by the Bank of Canada for the day the amount arose, or for the closest preceding day quoted, for any day after February 28, 2017. Converting an invoice on the day it is dated and the receipt on the day it lands leaves a difference, and that difference is income or a deductible loss. A separate election under section 261(3) lets a corporation compute its Canadian tax results in US dollars, but only where US dollars are the primary currency in which it keeps its books for financial reporting, and it must be filed within 60 days of the first day of the year it applies to. Tax and instalments are still paid in Canadian dollars either way. This guide states no worked conversion: see the reviewFlags. Source: Department of Justice Canada, consolidated Income Tax Act, current to 2026-06-17, and Canada Revenue Agency, Income Tax Folio S5-F4-C1. Verified 2026-08-16. ↩

  2. Excise Tax Act, section 142(1)(g), which deems a service to be supplied in Canada where it is, or is to be, performed in whole or in part in Canada. Source: Department of Justice Canada, consolidated Excise Tax Act, current to 2026-06-17. Verified 2026-08-16. ↩

  3. Excise Tax Act, Schedule VI, Part V, section 23, and section 165(3), which sets the rate on a zero-rated supply at 0%. Section 23 carries no condition about the customer’s registration status, unlike sections 8, 10, 10.1 and 23.1 of the same Part. Its four exclusions are a service rendered to an individual in connection with Canadian litigation, a service in respect of real property situated in Canada, a service in respect of tangible personal property situated in Canada while the service is performed, and acting as an agent or soliciting orders. Section 7 of the same Part is the general rule for services sold to a non-resident, and it excludes advisory, consulting and professional services at paragraph (b), which is why consulting sits in section 23 instead. Source: Department of Justice Canada, consolidated Excise Tax Act, current to 2026-06-17. Verified 2026-08-16. ↩

  4. Excise Tax Act, section 132(1), which deems a corporation to be resident in Canada if it is incorporated or continued here and not continued elsewhere, and section 132(2), which deems a non-resident with a permanent establishment in Canada to be resident in respect of, but only in respect of, activities carried on through that establishment. “Permanent establishment” is defined in section 123(1) as a fixed place of business, including a place of management, a branch, an office, a factory or a workshop. A corporation incorporated abroad can also be resident here under general legal principles where the central management and control of its activities is exercised in Canada, which the Canada Revenue Agency describes as a question of fact at paragraphs 8 and 9 of GST/HST Memorandum 4-5-1. Sources: Department of Justice Canada, consolidated Excise Tax Act, current to 2026-06-17, and the memorandum. Verified 2026-08-16. ↩ ↩2

  5. Excise Tax Act, section 123(1), definition of “recipient”, paragraph (a): where consideration is payable under an agreement, the recipient is the person liable under that agreement to pay it. The Canada Revenue Agency applies this to the parent-versus-subsidiary case at paragraph 18 of GST/HST Memorandum 4-5-1, “Exports – Determining Residence Status”, where advice about a Canadian subsidiary’s operations is zero-rated under section 23 if the non-resident, and not the Canadian subsidiary, was the party to the contract. Sources: Department of Justice Canada, consolidated Excise Tax Act, current to 2026-06-17, and the memorandum. Verified 2026-08-16. ↩

  6. Canada Revenue Agency, GST/HST Memorandum 4-5-1, “Exports – Determining Residence Status”, paragraphs 16 and 17 and Appendix A. Paragraph 16 places the responsibility for determining a customer’s residence on the supplier. The Appendix A specimen for a company is signed by an authorized officer who gives their name and title, names the company and its legal address, certifies that it isn’t resident in Canada for Excise Tax Act purposes, states that they have personal knowledge of the matter, agrees to advise the vendor of any change to that residence status, and dates the certification. Paragraph 17 adds that the documentation should be dated, signed and effective on the date the supply is made, so one certification signed at onboarding doesn’t by itself support a much later invoice if the client’s facts have moved. Verified 2026-08-16. ↩

  7. Excise Tax Act, section 148(1)(a) and (b) and section 148(2)(a) and (b). Paragraph (a) of each subsection measures the threshold by the consideration for taxable supplies made inside or outside Canada, and paragraph (b) of each sets the amount at $30,000. The Canada Revenue Agency page “When to register for and start charging the GST/HST” states in its first footnote that the calculation uses worldwide revenues from taxable supplies, including zero-rated supplies. The $30,000 threshold, its two measurement windows and the registration deadlines are stated in full at /guides/gst-hst-registration/. A registration can be cancelled on request under section 242(2), effective after the last day of a fiscal year, once the person is a small supplier again and has been registered for at least a year. Source: Department of Justice Canada, consolidated Excise Tax Act, current to 2026-06-17. Verified 2026-08-16. ↩

  8. Ontario HST at 13% is used here to size an example rather than as a rate you charge a US client, whose invoices carry 0%. The province-by-province GST/HST rate list, with its source, is stated in full at /guides/gst-hst-registration/ and is matched rather than re-derived here. Verified 2026-08-16. ↩

  9. Canada Revenue Agency, Guide RC4022, “General Information for GST/HST Registrants”: “When you register for the GST/HST, the CRA generally assigns an annual reporting period”, changed using Form GST20, Election for GST/HST Reporting Period, or the “File an election” digital service in My Business Account. Its “Assigned and optional reporting periods” chart assigns annual filing at $1,500,000 or less of annual taxable supplies, quarterly above that up to $6,000,000 and monthly beyond, and the revenue measured for those thresholds excludes zero-rated exports of property and services. The statute matches: the “threshold amount” is defined in Excise Tax Act sections 249(1)(a) and 249(2)(a) as consideration for taxable supplies made in Canada other than supplies included in Part V of Schedule VI, which is the export Part this article turns on. Section 248(1) carries the annual election and section 245(2) the quarterly and monthly rules. Monthly and quarterly returns are due one month after the end of the reporting period, and a corporation’s annual return is due three months after its fiscal year end, so March 31 for a December 31 year end. Sources: Canada Revenue Agency, and Department of Justice Canada, consolidated Excise Tax Act, current to 2026-06-17. Verified 2026-08-16. ↩ ↩2

  10. Canada Revenue Agency, Guide RC4058, “Quick Method of Accounting for GST/HST”: under the quick method “you still charge the GST at 5% or the HST at the applicable rate on your supplies of taxable property and services (other than zero-rated supplies)”, and “the quick method remittance rates already take into account the ITCs for operating expenses and inventory purchases. Do not include any GST/HST paid or payable on these types of costs.” An exporter charging 0% therefore has nothing to remit a reduced rate on, and gives up the operating-expense credits. Verified 2026-08-16. ↩

  11. Internal Revenue Service, Instructions for Form W-8BEN-E (October 2021 revision), “Purpose of Form”, and the IRS page “NRA withholding”, which set withholding on US-source fixed or determinable annual or periodical income paid to a foreign person at 30% of the gross amount. The 30% is a statutory rate rather than an annually indexed figure. Source: Internal Revenue Service, a US issuer rather than a Canadian one. Verified 2026-08-16. ↩

  12. Internal Revenue Service, “Source of income – personal service income”, under which the place where the personal services are performed normally determines the source of that income, regardless of where the contract was made, the place of payment, or the residence of the payer. Source: Internal Revenue Service, a US issuer rather than a Canadian one. Verified 2026-08-16. ↩

  13. Canada-United States Tax Convention Act, 1984 (S.C. 1984, c. 20), Schedule I, Article VII(1), under which the business profits of a resident of Canada are taxable only in Canada unless that resident carries on business in the United States through a permanent establishment situated there. Source: Department of Justice Canada, current to 2026-06-17. Verified 2026-08-16. ↩

  14. Internal Revenue Service, Form W-8BEN-E and its instructions, October 2021 revision, being the version in force as at 2026-08-16. On line 5 the instructions state that for most chapter 4 (FATCA) statuses the filer must complete an additional part of the form certifying that the conditions of the status indicated are met, and Part I of the form closes by directing the filer to complete the remainder of the form including signing it at Part XXX. For an ordinary operating corporation the status is normally Active NFFE, certified at Part XXV, line 39, which turns on an assets and passive income test. Line 9b, the foreign tax identification number, is mandatory only where the form documents an account held at a US office of a financial institution and the filer receives US-source income reportable on Form 1042-S, which a consulting client’s accounts payable department is not, so it is optional for this reader. The instructions also state that a form is valid from the date it is signed to the last day of the third succeeding calendar year unless a change in circumstances makes information on it incorrect, that under certain conditions it remains in effect indefinitely absent a change of circumstances, and that on a change in circumstances the filer must notify the withholding agent within 30 days. Source: Internal Revenue Service, a US issuer rather than a Canadian one. Verified 2026-08-16. ↩ ↩2

  15. Internal Revenue Service, Form W-9, Part II, under which the signer certifies under penalties of perjury, among other things, that “I am a U.S. citizen or other U.S. person”. Source: Internal Revenue Service, a US issuer rather than a Canadian one. Verified 2026-08-16. ↩

  16. IRS foreign-corporation Form 1120-F filing responsibilities and Form 1120-F instructions distinguish a US trade or business from a treaty permanent establishment. A foreign corporation engaged in a US trade or business can need a return even where a treaty exempts the income, with treaty disclosure or a protective return appropriate to the facts. Filing and treaty distinctions checked 2026-09-25. ↩

  17. Canada-United States Tax Convention Act, 1984 (S.C. 1984, c. 20), Schedule VI, being the Fifth Protocol in force since December 15, 2008, Article 3, which inserted Article V(9) of the Convention. A services permanent establishment is deemed to exist where services are performed in the United States by an individual present there for 183 days or more in any twelve-month period and more than 50 per cent of the enterprise’s gross active business revenues for that period consists of income from those services. A services permanent establishment is also deemed to exist where services are provided in the United States for 183 days or more in any twelve-month period on the same or a connected project, for customers who are US residents or who maintain a US permanent establishment the services relate to. Source: Department of Justice Canada, current to 2026-06-17. Verified 2026-08-16. ↩

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