GST/HST on eBay Fees?

[pierrelebel]

Coming to Canada soon?

http://www.ecommercebytes.com/cab/abn/y15/m01/i07/s03

[nuvistors]

Let your imagination run wild !

[cumos55]

Look at your invoice from eBay.

No GST/HST charged....

No GST Number...

It makes sense for eBay to have a GST Number....

because everything they buy in Canada is taxed... , 

and GST/HST becomes an Input Tax Credit.... and then eBay gets a Tax Refund.... if they sell nothing... and they do not charge GST/HST on the fees charged to Canadian sellers.

The evidence is in the invoice....

[pjcdn2005]

What does saying that there is no gst charged on ebay fees have to do with being pro ebay?

And - why would someone who is pro ebay not benefit from your audit experience?

Are you saying that you were audited recently and that you have a ruling from the government that states you can claim a gsp credit on ebay fees? If so, please do share your information.

[anguscoinshop]

I will share only with other business that have a gst/hst number. What is your gst/hst number?

[pierrelebel]

re: post 20

Raphael could we please have your comment on the subject.

[raphael@ebay.com]

---

@anguscoinshop wrote:

It is obvious that Raphael is not versed at all on Canadian taxation laws. 

---

While this may be true, I'm very well versed in eBay fees and invoicing and I re-confirm that sellers aren't charged tax on their eBay fees.

[pierrelebel]

Thank you Raphael for your post.

However, for many years, the same subject has been kicked around with

1) eBay-Canada claiming that eBay does not charge GST/HST to Canadian buyers while

2) anguscoinshop has consistently claimed he has a ruling in writing from Canada Revenue Agency (CRA) that you  (and PayPal) do and, as a result of such ruling, GST/HST registered users are entitled to Input Tax Credit on the tax portion of the fees they have paid eBay (and PayPal)

Who are we to believe?  eBay-Canada or Canada Revenue Agency?

[fatdane]

During my last audit by CRA the auditor was a bit surprised that eBay managed to avoid charging GST/HST but after he looked at it a bit he thought that eBays European tax dodge was legal and that eBay did not have to charge GST/HST. When I asked if I could set up a branch company in the Cayman Islands and avoid the tax I got a dirty look from him.

[cumos55]

Priceless!!!

[anguscoinshop]

I guess that is a personal decision for all to make. The only thing you can do is to write your own letter to the CRA's ruling division. Once you have it it is up to you to decide who you share it with.

I shared mine with other business in my field, now it is up to them to decided what to do with the info.

As far as CRA's ruling division goes i imagine there response to all that written request to them would be universal the bulk of the way.

Funny, the first thing the auditor ask for was that very letter from the CRA's ruling division and she said she saw the same in the CRA's office "All GST/HST from ebay and paypal are approved" and all conditions are met.

That was short and sweet GST/HST discussion.

Love it. 🙂

[anguscoinshop]

I'm sure you are, knowledge can be hard on the tax subject. The CRA's ruling division decided that since there's a GST/HST number on account with ebay
Canada the CRA deemed the sales tax was included in the total of the invoice(there are conditions to meet to be able to claim).
What matters here is to be covered by a letter from the CRA.

[cumos55]

The invoice from eBay shows.

(1) No amount reported as GST or HST

(2) No GST/HST number.... There is no number on my invoice!

(3) The total amount presented in the invoice  is for fees and fees only...

(4) The fees presented in the invoice are based on insertion fees, FVF, Store fees  and everything else  eBay says are what a seller must pay.

(5) and if (4) is correct for fees as  specified by eBay ... a claim that the total includes GST/HST is definitely in error..

(6) The invoice follows the rule for a corporation that does not have to collect GST/HST

eBay's invoice for fees  speaks for itself...No other interpretation allowed....

[anguscoinshop]

It doesn't matter what you write, #1 your not registered #2 The CRA allowed all my itc. That speaks volume.

[maggiebvintage2010]

Just for clarification, are you saying that because YOU have a GST/HST number registered with eBay, and YOU met certain other conditions (which may be that your eBay fees are $150 or more monthly plus you pay them with a Canadian credit card OR which have not been explained here) that CRA deemed sales tax is included in YOUR invoice total, and have provided you with a letter so you can continue to claim GST/HST on your eBay fees as an Input Tax Credit?

This situation obviously does not apply to every eBay seller, even those registered to collect GST/HST, but you're saying that others who do meet that conditions may receive the same treatment by CRA and receive such a letter, if they ask, is that right?

I don't mean to belabour the point, just want to understand.

[cumos55]

The application of GST/HST must be uniform across all invoices..

The rules are the same for everyone registered with CRA...  There is no selective action  for some and not for others....

I am registered as a business on eBay.

I am registered to collect GST/HST with CRA

eBay does not charge GST/HST on my invoice......

If you do contact CRA  send them a copy of your invoice from eBay.....  and only then will it be clear that eBay does not charge GST/HST on invoices.

A copy of the invoice  is critical for CRA's analysis of the situation....

One cannot assume that the total amount on an invoice has GST/HST hidden within that final amount in the invoice...

The rule with invoices is that the GST/HST amount must be identified  and the CRA registration number must be shown on the invoice.... as per rules set by CRA.

[femmefan1946]

Is there a difference between 'charging ' and 'remitting' though?

Many businesses (eBay or not) have chosen not to charge customers the GST, which has been allowed since Day One (remember KMart?) but do remit the appropriate amount to Revenue Canada.

Ontario required sales tax to be both charged and remitted, making those occasional 'we pay the sales tax' sales somewhat shakey legally.

[pjcdn2005]

I think that eBay has been clear that they do not charge sellers gst and they do not remit gst to the government.

[pierrelebel]

"Many businesses (eBay or not) have chosen not to charge customers the GST, which has been allowed since Day One (remember KMart?) but do remit the appropriate amount to Revenue Canada."

That is correct.  GST registered sellers can charge or not charge GST/HST on taxable sales but, in all instances, they must remit the tax to GST/HST.  Way back when GST was first introduced, Woolco at the time decided to absorb the tax (7% then) in their prices for taxable goods while most other large retailers added the tax at the cash register.

So the question is rather simple: does eBay include the tax (GST/HST) in the fees it charges sellers or not?

According to eBay it does not.  The reason for that is that the service provided by eBay is NOT taxable (same for PayPal)

According to anguscoinshop it does.  He has a ruling in writing from CRA stating that the service is taxable and the tax included in the monthly invoice charged by eBay to his credit card. This ruling allows him to claim Input Tax Credit for the full amount of GST/HST included in the fees paid to eBay and PayPal.

And that is the question - who do you believe?  eBay or CRA?

[cumos55]

The following comes directly from a CRA publication available online....'

Informing your customers

You have to let your customers know if the GST/HST is being applied to their purchases. For taxable supplies (other than zero-rated supplies), you have to show:

■ that the total amount paid or payable for a supply includes the GST/HST;

■ the amount paid or payable for the supply and show the amount of the GST/HST payable on the supply separately; or

■ the GST/HST rate that applies to the supply. If HST applies to the supply, show the total HST rate. Do not show the federal and provincial parts of the HST separately.

You can use cash register receipts, invoices, contracts, or post signs at your place of business to inform your customers whether the GST/HST is included in the price or added separately.

Sales invoices for GST/HST registrants

In addition to the general rules described above, you have to give customers who are GST/HST registrants specific information on the invoices, receipts, contracts, or other business papers that you use when you supply taxable goods and services. They need this information to support their claims for ITCs or rebates for the GST/HST you charged. Similarly, when you make business purchases, the invoices from your suppliers will support your claims for ITCs. If your customers ask you for an invoice or receipt so they can claim ITCs, you have to give them specific information, depending on the amount of the sale.

and a lot more to read at.....

http://www.cra-arc.gc.ca/E/pub/gp/rc4022/rc4022-13e.pdf

The above information came from page 13 of this document....

[pjcdn2005]

And that is the question - who do you believe?  eBay or CRA?

Well since I haven't seen this ruling, so I don't know exactly what the CRA has ruled. It should be easy enough for them to check to see if ebay remits gst collected on fees paid and if gst is not remitted, why would the CRA allow sellers to claim them as an input tax credit?  All of the information doesn't seem to fit together.