@rose-dee wrote:
By the way, do you happen to know if there are any complications in setting up listings on eBay so that only Canadian buyers pay GST/HST? I presume the seller him/herself has to remit the collected tax to the government, but how often? One site I sell on actually does the collecting and remitting of VAT themselves, relieving the sellers of this tiresome task, but I don't expect eBay is that accommodating with respect to GST. Or is it?
If you've been charging GST/HST to Canadians as a Canadian seller, have you encountered any buyer complaints or negative FB about having to pay tax? Since a lot of Canadians must be used to being able to avoid paying GST by buying online, being obliged to pay it might not make them very happy. For some people, that extra potentially 15% is significant.
Does eBay itself provide any automated input during the checkout flow (i.e. by applying the correct %, whether GST or HST, depending upon the buyer's location), or is this something the seller has to do? For example, if a Canadian buyer uses the cart and pays in the usual way without any invoice from the seller, does eBay's system calculate the appropriate tax?
I'd actually be very interested in hearing from any sellers who have been charging GST/HST for some years on whether it has created any particular buyer issues, and how easy or difficult the set-up and remittance process is.
No complications with setting things up. You setup a tax table which will assign the taxes based on the ship to province. As a seller you are responsible for collecting and remitting. Small businesses are assigned to an annual filing, although you can choose to file monthly or quarterly.
With respect to buyer complaints, yes you will get some but not an overwhelming number of them. Unfortunately there is a portion of ebay buyers who believe they should not have to pay taxes on an online purchase or who simply don't understand how sales taxes work. I have only encountered one strong objection which was from a former RCMP officer (I knew of the individual from a forum relevant to the niche I sell in) who has worked retail before. That one made me scratch my head. Everyone one else who inquired was entirely reasonable when it was explained to them why taxes apply. No negative feedback related to that since the taxes are clear at the shopping cart level. I would not say it materially effected my Canadian sales at the time. How much it impacts will depend on how competitive your selling niche is domestically and what your value add is beyond price alone.
The cart will reference the tax table you setup during the checkout flow and apply based on the buyer's shipping address. Setting up the tax table is as simple as entering a number in a box and ticking a check box. As Pierre notes, the remittance process is as easy as it gets. The relevant information you are already preparing for your taxes anyways. You enter a few fields of data (in my case 4) and it tells you whether you owe funds or have refund owing. They changed it in recent times so that zero rated (international) and domestic sales revenue numbers are separated (they did this to get a get picture of why people where claiming gst refunds and to fine tune who should be audited) so you'll have to a bit of sorting there.
To get that revenue breakdown simply run a paypal history file for the reporting period then you can filter Canadian sales to separate the two. In the paypal history file they separate ebay payments, paypal invoice payments, and any manual payments received so you'll have to do a bit of extra filtering there. The monthly financial summary report in paypal will help you ensure you've flagged all applicable payments received as it provides you with a monthly lump sum total to use as a check. If you have a separate inventory or accounting program that you input your sales into you'll likely be able to use that to generate the numbers and can bypass this step.
The only other real work is keeping track of GST amounts paid on things which are eligible as an input tax credit. A receipt scanner such as those offered by neat can help with keeping track. The first time through you may want to have a tax professional aid you so you get a better understanding of what ITCs are applicable to you and how you can maximize those.
Again I would reiterate these are all things you should be doing anyways as part of your annual income tax reporting, as if you ever get audited you'll need to have all of this to hand.
