No. If you are a Canadian freelancer or self-employed professional providing services to clients in the United States, you do not charge Canadian GST/HST. Services exported outside Canada are zero-rated under the Excise Tax Act, meaning the applicable tax rate is 0%.
This guide explains exactly how zero-rating works, what it means for your invoices, and what to do once you are registered for GST/HST.
What “Zero-Rated” Means
Zero-rated is not the same as exempt. Both result in 0% tax charged to the client, but the difference is important:
- Zero-rated: You charge 0% GST/HST, and you can still claim Input Tax Credits (ITCs) on GST/HST you paid on Canadian business expenses. This is the status that applies to exported services.
- Exempt: You charge 0% GST/HST and you cannot claim ITCs. This applies to categories like basic groceries and medical services.
Zero-rating is better — you get the tax benefit of ITCs without charging your international clients anything extra.
Which Services Are Zero-Rated When Provided to US Clients?
Most freelance and professional services qualify for zero-rating when provided to non-resident clients located outside Canada. This includes:
- Software development and IT consulting
- Marketing, copywriting, and content creation
- Graphic design and creative services
- Business consulting and strategy
- Translation and interpretation
- Accounting and bookkeeping (for non-Canadian clients)
- Legal services (for matters outside Canada)
A service is not zero-rated if it is consumed in Canada — for example, if a US company hires you to manage their Toronto office or train their Canadian employees on-site. In that case, GST/HST applies because the service is delivered and consumed in Canada.
If you are unsure whether your specific service qualifies for zero-rating, consult a CPA or refer to CRA‘s guide “GST/HST — Zero-Rated and Exempt Supplies” (RC4022).
Do You Need to Be Registered for GST/HST to Bill US Clients?
No. You can invoice US clients for services without being registered for GST/HST. Registration is only required once your total taxable supplies (from all clients, Canadian and foreign) exceed $30,000 in four consecutive calendar quarters.
If you are below the threshold, simply invoice your US clients with no tax line. If you are registered, include a line showing: GST/HST: $0.00 (zero-rated export of services) and your GST/HST registration number.
Invoice Wording for US Clients
When you are registered for GST/HST, your invoice to a US client should include:
Services: [Description] USD 2,000.00 GST/HST (0% — zero-rated export) 0.00 Total Due: USD 2,000.00 GST/HST Registration No.: [Your 9-digit BN followed by RT0001]
Including your registration number and the zero-rating note protects you in the event of a CRA audit. Keep records showing the client is located outside Canada (client address on the invoice, communication records, or a copy of their US business registration).
Can You Still Claim ITCs on Your Business Expenses?
Yes. Even though you charge 0% to US clients, you can still recover GST/HST you paid on Canadian business expenses through Input Tax Credits. For example:
- You paid $130 HST on accounting software and office supplies
- You billed $5,000 USD to US clients at 0%
- You are entitled to claim back the $130 HST as an ITC on your GST/HST return
This is one of the main reasons that voluntary early GST/HST registration can make financial sense for freelancers with significant business expenses — even before crossing the $30,000 threshold.
What About Services to Clients in Other Countries?
The same zero-rating rule applies to services exported to clients in any country outside Canada — not just the US. Services to UK, European, Australian, or any other foreign clients are zero-rated under the same rules.
Frequently Asked Questions
What if my US client has a Canadian office?
If the Canadian office is the actual recipient of your services, GST/HST likely applies. The key question is where the service is consumed. If you are serving the Canadian operation of a US company, treat it as a Canadian client and apply the appropriate GST/HST rate. If the services benefit the US parent company with no Canadian component, zero-rating may still apply — confirm with a CPA.
Do I need to keep records to prove my client is in the US?
Yes. The CRA may ask for evidence that the service was exported. Acceptable documentation includes: the client’s invoice or purchase order with a US address, email correspondence showing the client’s US location, or a copy of their US business registration. Keep these records for at least six years.
Do US clients need to provide anything to me?
No. Unlike in some other countries, Canadian zero-rating for exported services does not require any certification from the US client. You self-assess the eligibility based on the client’s location and the nature of the service.