Amazon FBA (Fulfilled by Amazon) is one of the most popular business models for Canadian entrepreneurs selling on Amazon.com. Shipping inventory to US Amazon warehouses and selling to US customers is extremely efficient — but it comes with US tax obligations that require an ITIN for Canadian sellers.
Amazon FBA and US Nexus for Canadians
When a Canadian Amazon seller ships inventory to Amazon FBA warehouses in the US, they create US 'nexus' — a connection to US states that can trigger sales tax obligations. For federal US income tax purposes, FBA sellers may also need to file a US tax return if they have a US permanent establishment.
An ITIN is required for:
- Completing Amazon's tax interview to avoid withholding on proceeds
- Filing a US tax return if required (Form 1040-NR)
- Operating a US LLC that receives Amazon FBA payouts
Amazon FBA Tax Interview for Canadians
Amazon's seller central has a tax interview that all professional sellers must complete. As a Canadian FBA seller:
- Select 'Individual' or 'Business' (depending on your structure)
- Select 'Non-US person/entity'
- Enter your ITIN (for individuals) or LLC's EIN (for entities)
- Claim Canada-US Treaty benefits if applicable
Without completing this, Amazon withholds 30% from your FBA payment proceeds.
Setting Up FBA Through a US LLC
Most serious Canadian FBA sellers operate through a US LLC for simplified tax reporting and to avoid the 'permanent establishment' complexity of selling as an individual. The LLC receives FBA payouts, files Form 5472 annually, and maintains a clean separation between your Canadian personal finances and US business operations.
ITIN Plus for Canadian FBA Sellers
$99, 8–14 weeks, IRS Certified Acceptance Agent. Email apply@itinplus.com. We serve Canadian FBA sellers across all product categories.
Frequently Asked Questions
Do Canadian FBA sellers create US tax obligations?
Yes. Shipping inventory to US FBA warehouses creates nexus in US states, potentially triggering sales tax collection obligations. Federal income tax obligations depend on whether you have a US permanent establishment. Consult a US CPA specializing in Amazon FBA for your specific situation.
Do Canadian FBA sellers need an ITIN?
Yes. Amazon's tax interview requires a Tax ID for all sellers. Without an ITIN, Amazon withholds 30% from your FBA payment proceeds. An ITIN (or your LLC's EIN) eliminates this withholding when combined with a W-8BEN or treaty claim.
Is it better to sell FBA as an individual or US LLC as a Canadian?
Most tax advisors recommend using a US LLC for Canadian FBA sellers to simplify tax reporting, avoid personal liability, and create clear separation between Canadian and US business finances. An ITIN is needed regardless of structure.
How long does it take to get an ITIN?
8–14 weeks from the IRS submission date. Apply through ITIN Plus for $99.
What is sales tax nexus for Canadian FBA sellers?
Nexus means you have a sufficient connection to a US state to be required to collect and remit that state's sales tax. Storing inventory in FBA warehouses typically creates nexus in that state. Use a service like TaxJar or Avalara to manage US sales tax compliance.