Platform Fees, Shipping, and Inventory — All Tracked
Selling on Amazon, Etsy, or Shopify means managing platform fees, shipping costs, and inventory across provinces. ScanForTax categorizes every expense to the right T2125 line automatically.
How E-commerce Sellers Use ScanForTax
Real scenarios where ScanForTax saves you time and money at tax time.
Monthly Amazon Seller Fees
Your $39.99/month Amazon Professional account fee plus $250 in referral fees. ScanForTax splits these into the correct T2125 categories — office expenses and management fees.
Bulk Packaging Supply Order
A $300 order of mailer boxes, bubble wrap, and shipping labels. These are consumable supplies deductible on Line 8811.
Product Photography Setup
A $200 lightbox, backdrop, and phone tripod for product photos. Under $500, fully expensed as supplies rather than CCA.
Expense Categories for E-commerce Sellers
The T2125 line items most relevant to your work — ScanForTax maps these automatically from every receipt you scan.
| Line # | Category |
|---|---|
| 8871 | Management & Admin Fees |
| 8811 | Office Stationery & Supplies |
| 9270 | Other Expenses (Shipping) |
| 8320 | Cost of Goods Sold |
| 8520 | Advertising & Promotion |
Tax Rules E-commerce Sellers Need to Know
Platform Fees Are Fully Deductible
Amazon referral fees, Etsy transaction fees, Shopify subscriptions, and payment processing charges are all deductible business expenses under management and admin fees. These often represent 15–30% of gross revenue.
Inventory Must Be Tracked for Tax Purposes
If you sell physical products, you must track opening and closing inventory. Your cost of goods sold is: opening inventory + purchases − closing inventory. Unsold inventory at year-end is not deductible until sold.
T2125 Part 3 — Cost of Goods SoldCross-Province Shipping and Tax Collection
If you ship to customers in multiple provinces, you may need to collect and remit the appropriate GST/HST/PST based on the delivery destination — rates vary between Ontario, British Columbia, Quebec, and others. Marketplace platforms like Amazon handle this automatically for marketplace sales.
Sample Receipt Walkthrough
See how ScanForTax processes a typical e-commerce seller purchase.
Uline Canada
2025-03-15
Ontario
How ScanForTax categorizes this
All items are packaging supplies consumed in the shipping process — deductible on Line 8811. The $21.51 HST is fully recoverable via ITC. ScanForTax distinguishes between inventory (products for resale) and supplies (packaging materials) — an important distinction for cost of goods sold calculations.
Year-End Tax Checklist
Don't miss these steps before filing your T2125.
Count and value closing inventory as of December 31
Unsold products must be valued at cost or market, whichever is lower. This is required for your COGS calculation.
Export annual fee summaries from each platform
Amazon, Etsy, Shopify, and PayPal all provide annual tax summaries. Download them for your records.
Compile all shipping and postage costs
Canada Post, UPS, and FedEx charges are deductible. Include FBA inbound shipping if applicable.
Total up packaging and supply purchases
Boxes, tape, labels, and packing materials are supplies on Line 8811.
Review GST/HST collected and remitted across provinces
Verify that the correct tax was charged per delivery destination. Marketplace platforms handle this for sales through their platform.
Calculate home office deduction if you fulfill from home
If you store inventory and ship from home, the workspace and storage area are deductible.
ScanForTax handles most of this automatically
Scan receipts year-round and your categories, taxes, and ITC totals are ready when you need them — no year-end scramble.
Frequently Asked Questions
Are Amazon and Etsy fees tax deductible?
How do I track inventory for tax purposes?
Do I need to collect GST/HST on online sales?
Can I deduct my home office if I store inventory there?
Are shipping costs deductible?
Tax Guides by Province
See province-specific tax rates and recovery rules for e-commerce seller expenses.
Tax deadline is April 30th.
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