I’m a US business planning on selling products to Canadian customers. Do I need an extra-provincial license?

Americans, who are not incorporated, and who are carrying on business in a Canadian Province, must register their business in that province. To register, you must obtain an extra-provincial license. Failure to register can result in a penalty of $2,000 for individuals.

Selling products to Canadian customers or providing services to Canadian customers is considered to be ‘carrying-on-business’ in Canada. In addition, American corporations (LLCs, C-corporations and S-corporations) must also registered in a Canadian province where their business is conducted. Failure to register can result in a penalty of $25,000 for corporations. You have to obtain the extra-provincial license within 60 days of carrying on business in the specific province.

You should consult with a professional accountant to confirm the details of each province where you are carrying on business.

ABOUT THE AUTHOR

ALLAN MADAN

CA.CPA.CGA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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