Claiming Input Tax Credit on Bitney Powers Global shipping program

[stellersbrights]

When you buy goods off of ebay most foreign sellers use ebay's Global Shipping program (GSP).

As I understand it, you pay GSP  and then they handle taxes and importer fees.

Is there a way to figure out those Sales taxes paid and claim them as Input tax Credit for Canada?

Would CRA allow that.

thanks 

[momcqueen]

Nope. Somewhere within the Terms of the Global Shipping Program it is said the program is not for business imports. 

[stellersbrights]

I can see that in their terms of use, but could I still get away with claiming it to the CRA?

[recped]

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@stellersbrights wrote:

I can see that in their terms of use, but could I still get away with claiming it to the CRA?

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You can get away with almost any ITC if the total of your ITC claims are in line with your normal activity. Of course under an audit it MIGHT be questioned and possibly disallowed if the auditor didn't buy into your calculations.

PB/eBay's terms of use are irrelevant, the problem is that they neither supply a GST registration number nor indicate anything about GST/HST in any paperwork.

[kawartha-ephemera]

This setup always has puzzled me. The point is that there are GST or HST taxes being collected, if the taxes are being collected some entity must be receiving them. I would think Pitney Bowes would require their Canadian subsiduary to register for them to collect the money and remit. Doubtful that PB in the U.S. would be eligible to register.

Is it possible that the Federal Government is somehow deemed to be collecting the tax directly bypassing the usual reporting and remittance system?

What I mean by that is, could the taxes portion be going (paid) directly to Revenue Canada without Pitney Bowes ever handling those funds?

However those taxes are being handled it isn't right that a GST registered business importing product for business purposes and incurring GST expense to do it cannot claim an ITC.

Maybe avoiding the GSP and engaging a customs broker would be money well spent on larger transactions.

[reallynicestamps]

Many couriers collect duty and taxes and remit them to the appropriate governments.

It's really no different than paying tax at The Bay or Home Depot.

The difference is that the collection is done in another country.

Pitney Bowes is a large international company.

https://en.wikipedia.org/wiki/Pitney_Bowes

They collect a fee from the buyer that will more or less cover the duty and taxes they pay the governments.

Pitney Bowes is the importer, not the buyer.

[momcqueen]

Self-brokering is also an option but it requires legwork and effort.

[lotzofuniquegoodies]

If you were to receive a shipment through Canadapost that had duties and taxes owed you would get a receipt when you received your parcel with a breakdown of those charges. Taxes and any fees for clearing. Always did in the past.

If you were a business and had a broker clearing your shipments, you would get an itemized invoice for duties, taxes and clearing fees (depending on volume - per shipment on monthly). As a business, these are valid business expenses.

For my last transaction from the USA(August 2018) that involved GSP when I go I go to my Paypal account unable to locate trying several different ways that particular transaction or the fees involved. Clicking on Paypal transaction in eBay gives you this error message:

We are unable to find this transaction ID. Please check and try again later.

You should technically be receiving a copy of the actual duties/taxes & any processing fees paid by Pitney Bowes on your behalf with your delivery. They choose not to. "Possibly" because they are claiming as an expense for their purposes or can't be bothered?!?!? Is there any way to ask PB why they don't include? Curious to know what their answer/explanation would be!!!

-CM

PS. Remember. For a consumer buying online this amount would be small. For a business it could be a very substantial amount.

[momcqueen]

"PS. Remember. For a consumer buying online this amount would be small. For a business it could be a very substantial amount."

Businesses are expected to have better ways to import items for purposes of business than the Global Shipping Program. GSP is for the casual buyer. Proper businesses are expected to self-broker or have a customs broker on call. Or their own logistics team.

Real businesses doing significant amounts of imports aren't ordering stuff to sell on ebay. Or if they are, they have their own methods in place to avoid using GSP. 

As the Global Shipping Program was never meant to serve businesses doing imports, I cannot image how long it would take to process paperwork on request for every Tom, Dick and Harry ebay buyer-**bleep**-seller who wants to claim a tax write-off. The handing fee charged by Pitney Bowes would have to be increased to accommodate that. It simply doesn't make logical business sense from Pitney Bowes or ebay perspective.

When I was importing products to sell on ebay, if the item that tickled my fancy had a GSP note on the listing, I shipped instead to my secondary American address and then I self-brokered at the border. 

[momcqueen]

Heavy sigh.

buyer-**bleep**-seller

Let me rephrase that: buyer-turned-seller

My bleeped word is a latin preposition. It's not meant as potty-mouth.

[lotzofuniquegoodies]

"Real businesses doing significant amounts of imports aren't ordering stuff to sell on eBay. Or if they are, they have their own methods in place to avoid using GSP. "

Some businesses may be only occasional buyers buying parts for items they repair in-house or purchasing as a request for a customer as required purchasing from the closest source. For them, it would be a taxable expense. Buying directly from a supplier usually requires a minimum order and buying through eBay would make it possible to avoid that minimum. Businesses buy from the River for the same reasons.

An itemized receipt for duties/taxes and preparation should not be rocket science. This situation compares to transaction details for Shippo in Paypal along with the associated emails. Transaction Details should reference tracking/shipment details but doesn't. As I recall, in the past with Paypal that information was clearly visible. (Tracking & Ship to address).

-CM

PS. Regardless of the fact if I am selling to an individual or a business as standard practice I ALWAYS include a copy of the sales order/packing slip INSIDE the box. And if it is going to a business I email prior to shipping if they have a Purchase Order # to include. Common response. Thanks. We appreciate you asking and they advise a number or a name/dept. to attach to the order. These are standard business practices that have been around forever. For receiving purposes this is required information.

[momcqueen]

"Some businesses may be only occasional buyers buying parts for items they repair in-house or purchasing as a request for a customer as required purchasing from the closest source. For them, it would be a taxable expense. Buying directly from a supplier usually requires a minimum order and buying through eBay would make it possible to avoid that minimum. Businesses buy from the River for the same reasons."

I'm not saying they wouldn't. What I'm saying is that those 'real' businesses will have other tactics to employ that make GSP unnecessary. You may take umbrage with my statement all you like. The River is as 'real' a business as one gets and I have yet to see any manner of packing slip with my order. I've stopped including packing slips in mine. Save the trees. 

Now, if you're trying to compare as a buyer pre-paying import fees to The River versus prepaying them to GSP, The River wins that contest, hands down. 

But you won't convince me on the seller front. 

Businesses don't need to use GSP. It's not for them. 

[reallynicestamps]

For an occasional purchase there are two methods of dealing with the problem.

Both involve the use of 'handwavium'.

• Ignore the probability of there being import fees at all and just charge the entire cost , GSP included to the customer.
• Work out the probable amount and subtract that from the monthly GST remittance, on the basis that no one is likely to look for proof. 

The greater the amount you remit, the more likely it is that an occasional unproven deduction is to be remarked.

[marnotom!]

"You should technically be receiving a copy of the actual duties/taxes & any processing fees paid by Pitney Bowes on your behalf with your delivery. They choose not to. "Possibly" because they are claiming as an expense for their purposes or can't be bothered?!?!? Is there any way to ask PB why they don't include? Curious to know what their answer/explanation would be!!!"

Pretty simple explanation, really. The "import charges" on a GSP-listed item are estimates calculated by a bot based on whatever information it can extract from the listing.

The amount the shipment ends up costing Pitney Bowes may end up bearing no relationship to what the bot calculated.

It's a bit like getting an estimate for a home renovation. Neither your estimate nor invoice are going to show every nail or scrap of sandpaper.

Besides, what's the point in getting a receipt for something you aren't on record as having paid for, anyway?

[tpi_2002]

Helpful Warning Below

Do not claim any input tax credits unless you have an official receipt showing the sellers GST/HST registration number and exactly how much taxes were paid.

If your are audited CRA will refuse those claims and you will have to pay it back including any fines and or penalties.

They will not even allow a receipt showing taxes paid if there is not a registered GST/HST number printed right on the invoice/receipt.

You can show them your cancelled cheque, emails etc proving taxes were paid and they will still deny the claim in my experience.

They might go after the seller as well but ultimately they consider you responsible for having the correct proof and paperwork.

I learned this the hard way during an audit and have heard similar horror stories from several other business people I deal with.

"It's a bit like getting an estimate for a home renovation. Neither your estimate nor invoice are going to show every nail or scrap of sandpaper."

The invoice doesn't have to show every detail? Just total taxes paid and the tax ID number of the business collecting the taxes. Supposedly for the Canadian government.

"Besides, what's the point in getting a receipt for something you aren't on record as having paid for, anyway?"

If Pitney Bowes is actually collecting these taxes for the CRA  and then supplied the legally required receipt we would all have the necessary record of having paid.

[marnotom!]

"If Pitney Bowes is actually collecting these taxes for the CRA and then supplied the legally required receipt we would all have the necessary record of having paid."

But Pitney Bowes isn't collecting the taxes. It's advancing them on behalf of the buyer and is considered "importer of record" for a shipment of items forwarded through the GSP.

Part of what constitutes a GSP listing's "import charges" is an estimated amount that goes toward the taxes and duty Pitney Bowes pays to the feds.

[retroman_studios]

The short answer is no.

I used to work for a small computer shop and would source parts from eBay, many of which were through GSP. Even those that weren't I still did as follows as it was the only way to really make sense of it.

Since I bought the parts and and sold them to my employer who in turn sold them to the customer, any taxes were simply rolled into the cost of the product. At my highest point I never really went over about $10,000 which if memory serves is a sort of tipping point as to whether you collect and remit taxes etc. Plus my employer had a GST # and PST # and if I collected and remitted taxes it would get insane quite quickly.

For my taxes, any tax that I paid simply became part of my cost, thus I was never "double taxed" in the sense that it was my net income that was taxed, since my costs were deducted and my net income was assessed.

I wanted to keep things simple, and since my annual income from this aspect of business was usually around the $10,000 mark, I opted not to sign up and remit.

Now, if you are registered, you can't claim what you didn't pay. Because you didn't pay the import fees, PBI did. Although they paid on your behalf, according to CBSA, PBI was acting on behalf of multiple clients, but those clients would not be named, as PBI takes sole responsibility as items cross the border. It's not like when DHL acts as a broker on behalf of a single client for a single transaction, where they relay payment from you with a service fee and in turn for a profitable fee, provide you full paperwork in your name.

In a sense, with PBI, it's an anonymous transaction as you are (from what I can gather) not included by name, but rather PBI fronts all costs and responsibilities.

An example of this I can provide. A few years back, I purchased an iPhone from a seller in the US. It was shipped with GSP. When it arrived at the border, there was no paperwork (or an error) and the shipment was seized.

Now, normally, if you have a package that is seized by CBSA, you will receive an official letter indicating why the seizure happened and how to contest it. I never was informed by CBSA, never received a letter. It was PBI who let me know via eBay. So that lends credence to the fact your name is not part of any official record when PBI clears items with customs.