What does this mean for sellers just trying to sell stuff, who do not have a store?

[novaeon98]

Will I be taxed just for selling old stuff or all this tax thing for those who have stores?

[ericsells75]

Buyers pay the tax. There are half a dozen posts available on this for you to review.

[pjcdn2005]

It makes no difference whether or not you have a store.  Buyers will still pay gst/hst/pst.

[femmefan1946]

Just as with your US customers, the Canadian taxes will be charged to the buyer according to his province.

The tax will show up on the invoice and the buyer pays it.

When Managed Payments processes the entire payment (price, shipping, and taxes) they charge you their fees.

So if you sell a $100 item to Alberta , which as only the GST of 5%, with shipping of $10, your buyer pays$115.50.

• You use the shipping paid by the buyer to purchase postage.
• EBay sends the tax paid by the buyer to the government.

In most categories Managed Payments charges the seller 12.6% fees.

You will be charged $14.55 in fees on the sale.

[explosion.morbide]

but... now for them to even consider finishing the transaction you have to lower ALL your prices...

[cardcentral_ca]

I don't know why you think this way.  What you should be doing is upping your prices so the buyer is paying the fees you will now be paying to ebay charged on the tax collected.

Pawn shops/brick and mortar stores with ebay stores, have been charging taxes for years and sell a lot.  Believe me that people will still buy what you are selling if they want it. 

People may stop spending money in general for a while, but it has nothing to do with taxes being charged for online purchase.

[brettjet38]

If you already did not know 

This TAX collection system was planned by your Canadian Government, not eBay! Partly because many of the sales are undeclared, which will now be hard to hide as MP is connected directly to the Bank Accounts of each Seller in essence so the CRA can more easily trace "Incomes".

It was in the 2021 Canadian Budget, you did read it right, as a voter you should always read what is going through the system in the pork rind, CBC and most mainstream media only tells you the "things" the GOV wants to be publicized...

It applies to all "online marketplaces" like Amazon, Etsy, and others. 

In fact, any marketplace "Facilitator" that generates over $30,000.00CDN in sales has no choice other than to charge and collect the tax, this is not an eBay thing, it's a Government thing, put in place by the people you elected and put into office...

...if you have an issue contact your local MP.

BTW - This is actually a worldwide thing, The UK, USA, Australia, and a whole slew of others already have a similar tax or shortly will.

[sabresoftware]

The problem is that the sale of a used personal item is not GST/HST taxable, so when I sell an old item (recently it was an Apple TV) the buyer was charged HST (Ontario), including an HST levy on the Canada Post fee that already included GST, so in effect he paid HST on GST.

The net effect will be to lower offered bids to compensate for this unnecessary tax levy, or to discourage Canadian users from using eBay, for either buying or selling personal items.

[reallynicestamps]

BTW-- while any taxes on this transaction will be paid by the buyer,  we are charged GST etc on our eBay fees for their service.

[marnotom!]

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@sabresoftware wrote:

The problem is that the sale of a used personal item is not GST/HST taxable, so when I sell an old item (recently it was an Apple TV) the buyer was charged HST (Ontario), including an HST levy on the Canada Post fee that already included GST, so in effect he paid HST on GST.

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Once you get another party involved, however, the game changes.  If you decided to consign that Apple TV with a shop that was GST/HST registered, that shop would have to charge GST/HST to the party that purchased it.  Yes, even though it's used.  

And when you purchase an item from a brick and mortar retailer, you're paying tax on the tax the seller paid for it, as well.  The seller may receive it back in the form of Input Tax Credits later on in the game, just as you could get credit for the tax charged on your Canada Post shipping method if you were GST/HST registered.

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@sabresoftware wrote:

The net effect will be to lower offered bids to compensate for this unnecessary tax levy, or to discourage Canadian users from using eBay, for either buying or selling personal items.

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This change doesn't just affect eBay but other "digital distribution platforms" (CRA's terminology) as well.  Something very similar has been in place for most US buyers purchasing online--not just from their fellow Americans, but also sellers in other countries--for the past two or three years.  If tax-adverse Americans can deal with this, so can Canadians.

Yes, this is a pretty new initiative and it does take a bit of brain-bending to grasp, particularly eBay's claim that the tax is on the transaction, not the item, but this change brings non-GST/HST-registered online sellers more into line with sellers that are registered, as well as making the playing field more level between brick and mortar retailers and online sellers, whether or not those sellers consider themselves "businesses" or not.

Non-registered online sellers who don't want to see their goods incur tax charges would be better off using "classified ad" style sites which don't use intermediaries to facilitate payments and communication.

[lotzofuniquegoodies]

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@reallynicestamps wrote:

BTW-- while any taxes on this transaction will be paid by the buyer,  we are charged GST etc on our eBay fees for their service.

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Maybe instead of calling this a "Transaction Tax" it should have been called a "Transportation Tax" due to the fact the item being sold is moving from A to B.

-Lotz

[sabresoftware]

Fair enough assessment. Since my last transaction incurred over 30% in eBay fees (not counting the GST/HST that the buyer had to pay) I am becoming disinclined to use eBay for selling very much anymore. I have come to the end of a string of sales of unused items lying around the house, and I don't tend to buy a lot of used items anyway so my use of eBay will drop significantly in the future.

What really annoyed me in my latest transaction was the fact that the buyer paid 18¢ HST on GST already paid for the Canada Post shipping, and I paid more fees to eBay as a result of the added GST/HST.

[marnotom!]

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@sabresoftware wrote:

Fair enough assessment. Since my last transaction incurred over 30% in eBay fees (not counting the GST/HST that the buyer had to pay) I am becoming disinclined to use eBay for selling very much anymore. I have come to the end of a string of sales of unused items lying around the house, and I don't tend to buy a lot of used items anyway so my use of eBay will drop significantly in the future.

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30%?  I respectfully disagree with your bookkeeping.  You must be factoring the fees strictly on the item price instead of considering the shipping price as well.  Sellers who offer "free" shipping are often folding some or all the actual shipping cost into the item price, eBay calculates its fees the same way, on the total transaction charge.

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@sabresoftware wrote:

What really annoyed me in my latest transaction was the fact that the buyer paid 18¢ HST on GST already paid for the Canada Post shipping, and I paid more fees to eBay as a result of the added GST/HST.

What you're selling already had GST/HST applied to it when you purchased it new and it still does when you sell it.  That used minivan that you bought a couple years ago had a 13% RST charge applied to it, even though it was also taxed when it was new.  The way I see it, you're "reselling" the Canada Post shipping service you're using as "SabreSoftware's Shipping Service" so it gets charged GST/HST just as any other shipping service.

eBay is somewhat sensitive to variations in the cost of doing business in the territories in which it operates.  If you look at the fee schedule for eBay.com versus that of eBay.ca, you'll notice some differences, and I think this is partly to do with the variations in shipping costs and taxes in each country.  For example, books and magazines get hit with a higher FVF percentage on .com than on .ca, and I think that's because the US postal service offers cheaper media mail rates unlike Canada Post.

Having said all that, if that sale you're referring to is for the one you had for $18, would you consider $6 sufficient recompense for going to all the work of listing, selling, and shipping it if you were selling it on somebody else's behalf?  I think it's more useful to consider the amount you're paying in eBay fees rather than percentages in order to measure the worth of the site to you.

[sabresoftware]

I don't care about all the transportation costs as the buyer picked them up, and paid all the taxes too, but I received 72.22% of the agreed selling price as my payment net of eBay fees, which makes the ebay fees 27.78%. The fact that eBay is cashing in on the delivery costs and double taxation is irrelevant to me. All I care about is my net cash receipt based on my agreed selling price.

GST/HST is a value added tax. As such paying them on a used item doesn't make any sense (other than it is easier to have a one size-fits-all approach to dealing with the taxation hole created by businesses trying to operate under the radar and not collecting the taxes while selling on eBay). Also Revenue Canada has indicated that used personal items are not GST/HST taxable, so while the services provided by eBay may be taxable, the item itself should not be (if it is a used personal item sold by an individual).

And charging GST/HST amounts on already paid GST/HST might well get eBay/Pitney Bowes audited by Revenue Canada.

[trains-n-toys]

So does this mean the CRA will demand that Facebook Marketplace(s) now charge sales tax? Facebook is a 'digital marketplace facilitator'.

[marnotom!]

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@trains-n-toys wrote:

So does this mean the CRA will demand that Facebook Marketplace(s) now charge sales tax? Facebook is a 'digital marketplace facilitator'.

My understanding from another poster who has some connections to CRA is that Facebook Marketplace is on its radar.  I suspect Facebook would have to make its checkout system compulsory/universal and eliminate external payment methods for this to happen.

For what it's worth, I regard FM as a classified ad site, but my opinion doesn't count for anything here.

[nbachorn519]

Yes it is an eBay thing. They are adding and collecting taxes on used goods sold by private sellers. Unless the private seller is a registered business with GST/HST registration number who sells over $30k worth of used goods a year those used goods are not subject to taxes. Instead of applying the July 22 legislation to eBay marketplace businesses, they are over broadly applying it to all sales items. Since the used items being sold are not subject to sales tax by the government Ebay is collecting these taxes and applying them to their own business as a tax benefit.

[mrdutch1001]

"Yes it is an eBay thing."

Sorry, but you are wrong! It is NOT an eBay thing! 

I sell used items on other selling sites and YES INDEED tax is charged on the sale of those used items!...

and NO I am not GST registered as I sell less than $1000 TOTAL per year across 3 selling sites...

The tax collection applies to those Marketplace facilitators that have been designated by LAW to collect these taxes!

[flipistics]

The tax applies to all sales on the marketplace. It does not depend on the individual being registered or not. This is what the law was changed to, so if you don't like it or think it's wrong you need to yell at your local government representatives.

As far as eBay incorrectly applying tax for their own benefit, this would be very highly illegal. A company the size of eBay would have zero chance of getting away with that. If you collect more tax than you were supposed to, by law you either have to refund the buyer or you have to remit to the government the addition tax you incorrectly charged. You can't just keep it or apply it to other things.

[reallynicestamps]

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