GST/HST Registration After Moving to the US: Cancel, Keep, or Zero-Rate?

Moving to the US does not automatically cancel your GST/HST registration. The Excise Tax Act operates independently from the Income Tax Act, so your GST/HST status does not follow your income tax residency. If you were registered before you left and you continue to make taxable supplies in Canada (or supplies connected to Canada), the registration may need to stay open, and if those supplies are services consumed outside Canada, they may be zero-rated. Getting this wrong in either direction costs money: keeping a registration you do not need means filing returns and potentially charging tax you should not be collecting, while cancelling a registration you still need means failing to collect and remit tax you owe.

Does leaving Canada cancel my registration?

No. Cancellation requires either a request from you or a determination by the CRA. Under ETA 242(1), a registered person may request cancellation, and under ETA 242(2), the Minister may cancel a registration where the person is no longer engaged in a commercial activity. Neither happens automatically when you change your address.

• If you were a voluntary registrant (under the $30,000 small-supplier threshold), you can request cancellation at any time
• If you were above the threshold, cancellation is available when you stop making taxable supplies in Canada or fall below the threshold and have been registered for at least a year
• The practical risk of not cancelling: the CRA expects GST/HST returns even if they are all zeros, and filing late generates penalties and interest

When are my services zero-rated?

Under ETA Schedule VI, Part V, certain exports of services are zero-rated (taxable at 0%), which means you charge no GST/HST but you can still claim input tax credits on Canadian expenses related to those services. For someone who moves to the US but keeps Canadian clients, this is the test that decides the answer.

The general rule for services (section 7 of Part V, Schedule VI) zero-rates a supply of a service made to a non-resident person, except where:

• The service relates to real property situated in Canada
• The service relates to tangible personal property that is situated in Canada at the time the service is performed
• The service is rendered to an individual who is in Canada when the service is performed
• The service is a transportation service
• The service is a telecommunication service

For a consultant, software developer, accountant, or other service provider who moves to the US and continues serving Canadian clients remotely, the key question is whether the service is rendered to an individual who is in Canada when the service is performed. If the client is a corporation (not an individual), this exception does not apply. If the client is an individual physically in Canada, the service is not zero-rated under section 7.

There is also a separate test under section 5 of Part V for advisory, professional, or consulting services, which zero-rates the supply when the service is made to a non-resident who is not a consumer of the service (meaning the non-resident is purchasing the service for business purposes, not personal consumption). This provision often applies when a non-resident corporation hires a Canadian-registered consultant.

The rules are fact-specific. Whether a particular supply is zero-rated depends on the nature of the service, who the client is (individual vs entity), where the client is, and what the service relates to. Getting this analysis wrong means either charging tax you should not (and the client may not be able to recover it as an ITC if they are not registered) or not charging tax you should (and owing it out of pocket plus penalties).

What if I am providing services to US clients only?

If all your clients are US-based (non-resident persons) and the services are not related to Canadian real property, Canadian tangible property, or individuals in Canada, the supplies are zero-rated. You keep the registration, file nil-tax returns (supplies at 0%), and claim ITCs on any remaining Canadian expenses.

• If you have no Canadian expenses left, the ITCs are zero too and the returns are pure zeros; at that point, cancelling simplifies your life
• There is no benefit to keeping a registration that generates zero ITCs and zero tax

What if I keep some Canadian clients?

You charge GST/HST on supplies to Canadian clients based on the place-of-supply rules, and your US-client supplies may be zero-rated under the export tests above. Most people who move end up with a mix.

• For B2B services, the place of supply is generally the recipient’s location; for B2C services, it is where the service is performed
• The zero-rating provisions zero-rate supplies made to a non-resident, but if your Canadian client is a resident, the supply is generally taxable
• The zero-rating helps in the other direction: when the client is a US company (a non-resident), section 5 or section 7 may zero-rate the supply

Here is the precise direction:

If you move to the US and provide services back to Canadian clients:

• You are the supplier (now a non-resident)
• The Canadian client is the recipient (a resident)
• The supply is made in Canada if the Canadian address of the recipient determines the place of supply under the general rules

In most B2B service situations, the supply is deemed to be made in Canada when the Canadian business address of the recipient is in Canada. That means GST/HST applies. The zero-rating provisions in Schedule VI, Part V, section 5 zero-rate supplies made to a non-resident, but the Canadian client is not a non-resident. So you charge and remit.

The zero-rating helps in the other direction: when your client is a non-resident (a US company hiring you). Then section 5 or section 7 may zero-rate the supply.

What about the non-resident override?

Under ETA 240(1), a non-resident person who does not carry on business in Canada is not required to register. If after moving to the US you no longer carry on business in Canada (no permanent establishment, employees, or place of business), you may not be required to be registered even if you make some taxable supplies in Canada.

• “Carrying on business in Canada” is a factual question: a fixed place of business, employees, a business bank account, or an agent soliciting orders can each establish the tie
• If you cancel, you lose the ability to claim ITCs, and your Canadian B2B clients cannot recover tax on payments to an unregistered supplier
• Some suppliers keep the registration specifically so their Canadian clients can claim the ITC

What should I do next?

List your clients by country. For each Canadian client, determine whether the supply is zero-rated or taxable under the place-of-supply rules. If all supplies are zero-rated or you have no Canadian clients, decide whether keeping the registration for ITCs is worth the filing obligation. If you have taxable supplies, keep the registration and file. If you cancel, send the request to the CRA before your next filing period closes, so you are not penalized for a late nil return.

• Keeping Canadian clients after moving to the US, the income tax side of the same scenario
• Leaving Canada permanently: a tax checklist, where GST/HST cancellation is one item on a longer list
• Am I still a Canadian tax resident?, because GST/HST registration and income tax residency are separate questions

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.