Some info on the Tax Collection sitch

[tch_ca]

I've emailed the CRA on this (and I don't mean junior front end staff). As far as the CRA is concerned there is no "agreement" with eBay with respect to collecting Canadian taxes and on how that may be done.  CRA's stance on the matter is that if a business or an entity overcollects, you can request a tax refund through the CRA if you feel you should have no or paid an incorrect amount of tax. Lastly, apperently there is nothing in the Canadian tax law that prevents anyone from collecting or overcollecting taxes for exempt or reduced items as long as that tax is remitted to the CRA by whomever collected it (Who would have thunk?..Right?...lol, but if you don't collect, warch out!....)I suspect Ebay will just go ahead and collect the tax across the board (exempt or not) and Ebay sellers will have to decide whether continuing to use eBay's platform is the right choice for them or maybe move their businesses and/or selling to an autonomous platform where they would have control over their tax burden. Frankly eBay is a large, uncooperative and unwilling dinasour at what it does anyway so its something to consider.

[pjcdn2005]

This might explain it...

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/digital-ec...

[mrdutch1001]

do you really think  eBay is the only selling platform that is going to be "collecting" Canadian taxes"?

Wrong!

Amazon, Etsy, are right there with eBay, others will be required to do so in time...

[tch_ca]

How is this relevant to my comment or eBay collecting taxes across the board? The small sellers have no say or an option in the matter.

[tch_ca]

Well yes and no. Ebay is unique in how it's structured and therefore can get away with implementing this tax strategy. If you are just renting space (shopify would be an example) then it's highly unlikely that would be possible since you are still managing your own tax strategy (collection, remittance, ITCs), etc.... .

[canada_goose_whisperer]

@tch_caTo add to that, the CRA told me they class Kijiji and Facebook as classifieds/advertisement sites, so they aren't subject to these same tax laws now or in the future as they do not have a controlling part of the transaction.

You are right that ebay is getting to be a dinosaur. There has been a bit of improvement, so for their sake I hope it continues.

I was also told something else very quite interesting by the CRA digital economies department regarding the legislation on July 1st, but I'm waiting for confirmation before I share it here (in an effort to avoid spreading misinformation). It will be good for sellers if true.

[femmefan1946]

Interesting to think that your email to the CRA was answered by senior staff.

I was one of the group answering letters to the Ministers and Deputy Ministers, of IAND and Agriculture Canada.

The information provided to us came from" junior front end staff".

Our job was to massage the information to be understandable to non-experts.

After being passed through a senior editor, it then went to the Minister's Office, for signature by a Special Assistant, usually a university dropout under 30, who got the job through political activism (one 20 yo, who handled the file on water on reserves, had only one semester's credits before moving to Ottawa and getting a $70K job, but her daddy was active in Conservative Maritime politics.)

This was the case whether I served under Conservatives and under Liberals.

[tch_ca]

To be clear, there was no written ermail response. The CRA and the digital group will not respond in writing to any informal inquiries (and many formal ones). The response was verbal via a call back. Secondly, I've had extensive communication on other matters with the CRA and have made some connections along the way. I also run a facebook advcocy page that brings awareness to the never ending overreach by the CRA. Cheers. 

[mrdutch1001]

"Ebay is unique in how it's structured and therefore can get away with implementing this tax strategy."

eBay, along with Amazon, Etsy and other similar selling sites are required by LAW to "implement" this taxation process. This new Canadian tax process is really NO different than the USA's "internet" taxation as set by laws in 45 USA states, whereby online maketplace facilitators MUST collect the state taxes applied to online purchases...

[tch_ca]

Again, it depends on how your web services are structrured, managed and the terms of your agreement. Are you a direct seller, third party, etc...I run a large website for my corp. I'm not obligated, nor will I likely be in the future to collect taxes for products that are exempt from Canadian tax (unless those product will no longer become exempt). In my case that is collectible coins and bullion of certain precious metal purity that is currently exempt. As a rule, the Canadian government cannot force you to pay sales tax on goods or services that are exempt. HOWERVER, the CRA does not care if an entetity collects excessive tax and remits it. The burden then falls on the buyer to go back to the CRA and claim a refund. Ebay is just being lazy and is blaming this on the CRA because it doesn't want to manage, worry and/or absorb the cost of policing what is exempt and what is not. If you feel you paid tax on product that is exempt or you are a tax exempt individual, you will have to go back to the CRA for a refund. I strongly recommend that people do that as a message to the CRA.

[mrdutch1001]

"I run a large website for my corp."

so if you have this big website that you run, why does it bother you so what eBay does?

Sellers will do what they need to do for their selling on eBay as to how it pertains to their own eBay situation.

Comparing your own website to eBay is pointles to the eBay seller/buyer

eBay sellers/buyers are going to concern themselves with what is going on with eBay...

eBay buyers are going to concern themselves with buying on eBay or whatever other site they so choose.

IF an item is exempt from tax and the buyer knows for a fact the item is exempt from tax, then they may choose a course of action.

Sellers on the other hand, are at the mercy of eBay and/or whatever selling site for how the taxation process is carried out, and will have to take their course of action.

The number of taxable items far out weigh the number of exempt items..

[marnotom!]

For what it's worth, post 15 on this thread contains a quote from the eBay "tax team" that states that eBay will refund the buyer over-collected tax and take responsibility in situations where tax was under-collected:

https://community.ebay.ca/t5/Canadian-Sales-Tax/Tax-exempt-items/m-p/479663

[mrdutch1001]

Thank you for reminding me of that post(forgot what and where I had read something about the refunding part)

[lotzofuniquegoodies]

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@tch_ca wrote:

Well yes and no. Ebay is unique in how it's structured and therefore can get away with implementing this tax strategy. If you are just renting space (shopify would be an example) then it's highly unlikely that would be possible since you are still managing your own tax strategy (collection, remittance, ITCs), etc.... .

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Total agreement to your comments. From eBay's perspective it is being done in a way to follow CRA rules according to some sort interpretation and how it will best benefits eBAY!!! How it could inadvertently affect big and small Canadian sellers in ANY way is last on eBay's mind. They can affort to have a legal accountant/layers on standby. Basic small business sellers cannot.

The kicker is the statement that was attached to this rollout. "Level the playing field!!?  Those words are laughable, but not in a good way!!!

-Lotz

[mrdutch1001]

From what I understand, Amazon has got this Canadian taxation process set up quite well...eBay, Etsy have not and the sellers on those sites cannot grasp any of this taxation process because the sites themselves cannot do right by it...

[marnotom!]

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@mrdutch1001 wrote:

From what I understand, Amazon has got this Canadian taxation process set up quite well...eBay, Etsy have not and the sellers on those sites cannot grasp any of this taxation process because the sites themselves cannot do right by it...

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My understanding--and you might be able to bear this out--is that Amazon wields a lot more control over its marketplace sellers and their selling processes than eBay and Etsy are able to over their sellers.

[mrdutch1001]

While I  may not condone everything Amazon does, and I would never be a seller there, I am far more comfortable as a buyer on Amazon than on eBay...

As a seller on eBay, I tolerate what goes on here...

As a seller who recently returned to Etsy after a 4 yr absence, ... well let me say this,Etsy is not a great place to be anymore, either ......

However, my seliing days on eBay, Etsy and a small lesser known site are winding down, so in another year or so, none of this will matter to me...

[tch_ca]

I use ebay for collectibles where many items are legally exempt from Canadian tax because of their metal content. I do so, because eBay has a bigger reach of an audience that I could possibly muster up on my own for THAT portion of my business. It's worth giving up the 10%. The point was that I have control over my tax burden with my own websiote, I no longer do with Ebay.