Why Amazon FBA Bookkeeping Is Complex in Canada
Selling on Amazon Canada (and Amazon US) creates bookkeeping complexity that standard small business accounting does not cover. Here are the layers:
1. Multi-currency transactions If you sell on amazon.com (US marketplace), you receive USD settlements. These must be converted to CAD at the Bank of Canada rate on the date of each transaction for Canadian tax reporting. Currency gains and losses are taxable.
2. Amazon collects HST on your behalf Since July 1, 2021, Amazon collects and remits HST/GST on sales through its Canadian marketplace — but you still need to track this in your books and reconcile it against CRA records.
3. FBA fees are complex Fulfillment fees, storage fees, referral fees, and advertising spend all come out of your Amazon settlement — not as separate invoices. Each must be categorized correctly in your books.
4. Inventory and COGS Calculating Cost of Goods Sold accurately requires tracking inventory purchased, landed costs (shipping, duties, customs), and units sold. This is a critical number — it directly affects your gross profit and tax owing.
5. US tax nexus Canadian sellers on amazon.com may have US sales tax obligations depending on where Amazon stores your FBA inventory. This is a complex area requiring US tax advice.
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HST Rules for Amazon Sellers in Canada
The marketplace facilitator rule (since July 2021): Amazon is now classified as a "distribution platform operator" under Canadian tax law. This means: - Amazon collects HST from Canadian customers on your marketplace sales - Amazon remits that HST directly to CRA - You do NOT remit HST on sales Amazon has collected on your behalf
What this means for your books: - Your Amazon settlement reports show net amounts (after Amazon's deductions) — no HST collected by you - You must still register for HST if your total revenue exceeds $30,000/year - You can claim ITCs on FBA fees charged by Amazon (these fees include HST that Amazon charges you) - If you sell through other channels (own website, Shopify, wholesale), you collect and remit HST on those sales yourself
Practical implication: Your HST return will show low or zero HST collected (Amazon handles it), but you will show ITC claims on fees — potentially resulting in net HST refunds if your ITC claims exceed HST collected from non-Amazon channels.
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Key Accounts for Amazon FBA Bookkeeping
| Account | What It Tracks |
|---|---|
| Amazon Sales Revenue (CAD) | All settlement proceeds converted to Canadian dollars |
| FBA Fulfillment Fees | Per-unit pick, pack, and ship fees |
| FBA Storage Fees | Monthly and long-term storage charges |
| Referral Fees | Amazon's commission (typically 8–15% of sale price) |
| Amazon Advertising | Sponsored Products/Brands campaign spend |
| Returns & Refunds | Customer refunds processed by Amazon |
| Inventory / COGS | Cost of goods sold: purchase price + landed costs |
| FX Gain / Loss | Currency conversion gain or loss on USD settlements |
| HST on Fees (ITC) | HST paid on FBA/referral/advertising fees (recoverable) |
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Best Software for Amazon Bookkeeping in Canada
A2X is the industry standard tool for Amazon sellers — it imports your Amazon settlement reports directly into QuickBooks Online or Xero, mapping each transaction to the correct account. Without A2X, reconciling Amazon settlements is a manual, error-prone process.
| Tool | Role | Cost |
|---|---|---|
| A2X | Amazon settlement import to QuickBooks/Xero | $29–$79/month |
| QuickBooks Online | Primary accounting software | $30–$90/month |
| Xero | Alternative to QuickBooks | $32–$90/month |
| Inventory Planner | Inventory forecasting and COGS | $99+/month |
A bookkeeper experienced with Amazon sellers uses A2X as standard practice — it saves hours of manual reconciliation and ensures every fee type is categorized correctly.
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Amazon Seller Tax Deadlines in Canada
| Obligation | Deadline |
|---|---|
| HST/GST quarterly filing | One month after quarter-end (April 30, July 31, Oct 31, Jan 31) |
| HST/GST annual filing | 3 months after fiscal year-end |
| T2 corporate return | 6 months after fiscal year-end |
| Corporate tax balance owing | 2 months after fiscal year-end |
| T4 payroll slips (if employees) | February 28 |
| T4A (contractors over $500) | February 28 |
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Should Amazon Sellers Outsource Bookkeeping?
Yes — multi-currency + FBA complexity makes DIY bookkeeping high-risk for Amazon sellers:
Common DIY errors: - Not converting USD to CAD correctly (wrong exchange rate = wrong income reported to CRA) - Missing COGS calculation (overstating profit, overpaying tax) - Not claiming ITCs on Amazon fees (leaving money on the table) - Confusing Amazon's HST remittance for your HST obligation (leading to under-filing or over-filing) - Missing FX gains/losses (these are taxable/deductible)
A bookkeeper experienced with Amazon FBA handles all of this correctly — using A2X for settlement reconciliation, calculating COGS properly, claiming all eligible ITCs, and delivering clean CPA-ready books every month.
Outsource Bookkeeping works with Canadian Amazon sellers at our standard $500/month flat rate. A2X setup and ongoing management included.
[Book a free consultation →](/contact) to get your Amazon books in order.
[Related: Bookkeeping for Retail Businesses in Canada →](/industries/retail) [Related: HST/GST Filing Guide for Canadian Businesses →](/blog/hst-gst-filing-guide-canada)
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