Invoicing clients outside Canada: zero-rated exports and USD

Plenty of Canadian freelancers and small firms work for clients in the United States, Europe or further afield. The invoice looks much like a domestic one, but three questions come up every time: do you charge GST/HST, what should the invoice say when you don't, and how do you handle US dollars?

This guide answers those for GST/HST registrants: services to non-residents, goods you export, the proof to keep, and invoices in another currency. The free invoice generator applies the zero-rated treatment when you choose "Client outside Canada".

The short version

Zero-rated isn't the same as exempt. A zero-rated supply is taxable at 0%, so you can still claim input tax credits for the GST/HST you pay on your costs. Zero-rated sales also still count in line 101 (sales and other revenue) of your GST/HST return.

Services to non-residents

Schedule VI, Part V of the Excise Tax Act zero-rates exports. For services, two provisions matter most:

• Section 7 zero-rates most services supplied to a non-resident;
• Section 23 covers advisory, professional and consulting services supplied to a non-resident.

Some services are excluded and are taxed as if the client were in Canada:

• services to an individual while they're in Canada, such as coaching a visiting client in person;
• services related to property in Canada, such as work on a building here or on goods that stay here;
• services related to litigation in Canada.

Some of the conditions also depend on whether your client is registered for GST/HST. GST/HST Memorandum 4-5-3 sets out the details, so check it, or ask the CRA or an accountant, if your work is close to one of these lines.

Goods you export

Goods you ship to a client outside Canada are generally zero-rated exports. Keep the shipping documents with your records.

What to write on the invoice

No wording is prescribed. A short note near the totals makes it clear why there's no GST/HST and helps if the CRA asks. When you choose Client outside Canada in Invoice Native, every line becomes zero-rated, no provincial tax is charged, and the invoice prints:

Zero-rated: export / supply to a non-resident (Excise Tax Act, Schedule VI, Part V)

This option is offered only to registered businesses. A small supplier doesn't charge GST/HST on anything, so their invoices to clients abroad need no note at all.

Keep evidence of non-residence

The supplier carries the proof. Keep evidence that your client is a non-resident, such as:

• their address abroad, on the invoice and in your contract;
• the contract or engagement letter;
• correspondence and payment records showing where the client is.

If the client turns out to be resident in Canada, or the service falls into an exclusion, GST/HST was due.

Invoicing in US dollars or another currency

Many clients abroad want to pay in their own currency. You can invoice in USD, EUR, GBP or another currency. On a zero-rated invoice there's no tax to convert:

Your GST/HST return is in Canadian dollars, so if you charge GST/HST on an invoice in another currency, for example to a Canadian client who wants to pay in USD, show the exchange rate and the tax in CAD. Invoice Native adds a line such as "Exchange rate: 1 USD = 1.3650 CAD · GST/HST $68.25".

Getting paid from abroad

Payers abroad usually need your SWIFT/BIC code along with your account details: account name, institution number, transit number and account number. A payment link or PayPal is often easier for small amounts. State a clear due date; see late payment interest for how to word an interest clause.

Withholding is the payer's job. Regulation 105 requires a payer to withhold 15% from fees paid to a non-resident for services performed in Canada, and Quebec has a similar 9% rule. Neither is something you put on your invoice, and Invoice Native doesn't calculate withholding.

Checklist

• ✅ Client's address abroad on the invoice
• ✅ The service isn't excluded (client in Canada, property in Canada, litigation)
• ✅ All lines zero-rated, no provincial tax
• ✅ A zero-rated note near the totals
• ✅ Evidence of non-residence kept with your records
• ✅ Currency chosen, and SWIFT/BIC for payers abroad