Taxes and Wholesale Drop Shipping in Canada
Disclaimer: This is general information, not tax advice. Consult a CPA for your specific situation.
Do I Need to Register for HST/GST?
In Canada, if your revenue exceeds $30,000 in a 12-month period, you MUST register for HST/GST. Even if you're below that threshold, you may want to register voluntarily to claim Input Tax Credits on your business expenses.
How Drop Shipping Revenue is Taxed
Your drop shipping income is treated as business income. You'll report it on your T1 tax return (sole proprietorship) or T2 (corporation). You pay tax on your net profit — revenue minus expenses.
Common Business Deductions for Drop Shippers
- Shopify subscription fees
- Marketing and advertising costs
- Website hosting and domain fees
- Business internet (home office portion)
- Professional services (bookkeeping, legal)
- Software and tools
Cross-Border Shipping (Canada → US)
When selling to US customers through wholesale drop shipping, the supplier handles customs and duties. With DFP Wholesale Supply, this is all managed automatically — your customer receives their order without complications.
Running a proper wholesale drop shipping business in Canada is straightforward when you have the right infrastructure. Designed For Perfection provides the wholesale platform — you focus on building your brand.