GST/HST on eBay Fees?

[pierrelebel]

Coming to Canada soon?

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

[dinomitesales]

Jeez, I just sat down and read this whole thread, dating back to 2015. All I have to say is... wow. The few sellers arguing that eBay was charging GST/HST in the past come off as conspiracy theorists; they provide no proof to back up their claims beside "CRA told me it was fine."

Were they committing tax fraud? Probably.

I wonder what anguscoinshop and orsainville_collectibles_canada would say now that eBay has made it clear on the position and GST/HST will be officially charged beginning July 1, 2017. I'm sure we'll never hear from them, though.

[cumos55]

Their comment would be....

See... I told you so .......

[cumos55]

I doubt if they would admit they were ever wrong.

Kind of reminds one of that certain person in the US that says ... Believe Me... even though he may be 100 % wrong.

To some people it becomes a game... where they are ... always... right 

All one has to do is ask the right questions...  in order to confirm they are right.... and get the wrong answers

Many times eBay sellers have been audited by CRA.... and ....  One of the comments related to the fact that eBay did not charge GST/HST on fees.  The invoices proved that eBay did not collect GST/HST  on fees.

It is most important that each seller that is registered to collect GST/HST understand the rules as set by CRA.....  the correct rules... 

Now July 1, 2017 will soon be here... GST/HST will be charged on fees

[pierrelebel]

"... I'm sure we'll never hear from them, though."

Actually I received an email from Ben on the subject yesterday.  Posting rules do not allow me to copy the message.  If the rules allowed it, most words would be rejected by eBay's computers as vulgar (and that is an understatement).  The guy is not happy with me for whatever reason.

The facts from many years ago, well before this thread was started, were relatively simple.  A Canadian poster (with a few disciples) suggested he was claiming ITCs on his eBay and PayPal fees because the tax was included in the fees charged.  That poster also suggested all Canadian sellers should do the same.

Claims were made that a "ruling" had been obtained from the local CRA office to that effect.  Upon verification (yes, I "know people who know people" at CRA) that claim proved to be nonsense.  What existed was an opinion letter, in answer to misleading questions, confirming that ITCs could be claimed if the supplier had a GST/HST registration number and the taxes were included in the selling price (fees in this case).

The problem was that there was NO TAX INCLUDED.  That was confirmed publicly over and over by senior management at eBay-Canada.  As far as PayPal was concerned, the nature of the fees charge is tax exempt.  The fact eBay and PayPal have GST registration needed for other businesses (such as selling postage for example) has nothing to do with "assuming" tax was included (we all know the meaning of "assume").

Fast forward many years and, as of July 1st 2017, the eBay fees charged to Canadian sellers will now be considered taxable.  As such eBay is obligated to charge the appropriate rate of tax (GST or HST) and remit same to the government.  Sellers who are registered with GST/HSt will recover those taxes fully through ITCs while non registered sellers will have to absorb the tax as they already do on all other taxes they pay.

The real reasons for the change at CRA are clouded. As stated earlier, the reasons given by eBay may not reflect the reality but were politically acceptable.

And yes, as expected, that poster now claims credit for the change in taxation forcing all sellers to pay GST/HST ("My push with my mp's influence has help to bring about the changes.").

Enough said on the subject.  That file is now closed.  Permanently.

30

[andyandted]

Please do not lump "every ebayer but a few realize ebay does not charge GST/HST". Ebay caters to eBay alone, And just because "eBay said they don't charge tax" does not mean for a second they do not do it in some way, I also agree that ebay's been far too secretive...to their own detriment.

[femmefan1946]

Another ZOMBIE THREAD

Remember that any thread over a year old is likely to include a great deal of incorrect and out of date information.

[cumos55]

The basics of GT/HST will not change.......as defined by the Canada Revenue Agency (CRA)

But... in that context it is the little things that one has to understand.

---------------------------------------

My biggest little thing had to do with lettermail within Canada.

For lettermail it is  GST to all provinces.  I use oversize  lettermail   and that little change in my application of GST as opposed to HST saved me  an amount equal to 10 %  on the cost of postage on each piece of lettermail (today's HST percentages)   

So if my charge to a buyer is $6.00... and with GST as opposed to HST I save 60 cents. as an amount that I do not have to remit to CRA

But then some will say that is only pennies......  A penny saved is a penny earned.

-----------------------------------------

There have been changes in HST percentage.... Now the Atlantic provinces ... NS, NB, NL and PEI ..... are all at 15 %

Then BC went from GST  to HST  and then back to GST.....

[cumos55]

In order to understand whether someone charges GST/HST or not, one has to know CRA's rules with respect to what must be present on an invoice.

If GST/HST is charged  the invoice must have a line that states what the taxes are... and then the Business Number must also be present in the invoice.

If one looks on last month's invoice.... there is no line for taxes or a Business number.

Now as of July 1, 2017... that line for taxes will be on the invoice  and eBay's Business number will also be there.

------------------------------------

If the tax  is included in the price of an item....  this must be stated  and the Business Number must be present on the invoice....

This is what I have to do.... mainly because for HST provinces  the charge on postage  is the HST percentage  while for books,  the HST percentage is 5 %... because books are exempt  from  the provincial component of HST.

eBay's invoice does not allow me to apply a full HST value on postage  and that lower HST = 5 % on books.for HST provinces.

[cumos55]

The ruling authority for taxation in Canada is the Canada Revenue Agency... CRA.

It is CRA's rules and regulations that we must follow.

-------------------------------------

Why did eBay not charge GST/HST ... before July 1, 2017?  Only eBay and CRA know that answer.

Why charge taxes after July 1?   Only eBay and CRA know that answer.

--------------------------------------

All that matters is that we, as Canadian sellers on eBay,  will see that value for taxes on an invoice from eBay

An ITC for those registered to collect GST/HST....  and an extra cost for those that are not registered to collect GST/HST

Many sellers with a total of sales plus postage approaching that $30,000 number... and sometimes a lot less than the $30,000 will register to collect GST/HST...  if only to get a refund of GST/HST charged on fees.

As of July 1, 2017  the tax on $1000 in eBay fees will be

(1) 5 % of $1000  = $50 for GST Provinces...  including Quebec

(2) 13 % of $1000 = $130  for Ontario

(3) !5 % of $1000 = $150 for NS, NB, PEI and NL, the Atlantic Provinces.

The question then becomes.....

...... At what level of sales  should one absorb the applicable amount of taxes ...

OR ...... Should one register to collect GST/HST, and  use that taxation on eBay fees as an Input Tax Credit.

[recped]

Why did eBay not charge GST/HST ... before July 1, 2017?  Only eBay and CRA know that answer.

The answer to this is plain and obvious, the company billing sellers for eBay fees is (was) based in Switzerland and had no operations in Canada of any sort. Foreign companies that bill Canadians for a service do not collect GST/HST unless they have a legal presence in Canada. eBay Canada is a different company than eBay International AG which is the company that bills Canadian eBay sellers and it is not a Canadian based company.

Why charge taxes after July 1?   Only eBay and CRA know that answer.

The mechanics of this are also obvious although the background reasons for the change are something we can only guess at. It would seem that eBay is folding eBay International AG at least to the extent that going forward all eBay billings to sellers will come from the local eBay companies. This change is worldwide which is why taxes are to be charged going forward in Canada, Australia, India (and no doubt other countries).

I could speculate on the reasons for this restructuring but I doubt very much it has anything to do with CRA. More likely is that it's for eBay own tax situation in the USA and possibly in preparation for the "gift" that Trump plans to hand over to US Corporations who have been stashing Billions of Dollars in offshore holding companies.

[pierrelebel]

"...but I doubt very much it has anything to do with CRA..."

Ben claims he was instrumental in forcing the change!

His exact quote:

"My push with my mp's influence has help to bring about the changes. Enough
businesses have been claiming the itc on their ebay fees it has force ebay
to comply with the CRA."

[cumos55]

There is one and only one reality.

eBay will charge GST/HST on the fees paid by Canadian sellers

-------------------------------------------

Each and every Canadian seller on eBay will make an adjustment.

For some  this will be a bookkeeping adjustment.

Some form of mental or physical ... or even a major bookkeeping adjustment will be needed by other sellers..

[recped]

---

@pierrelebel wrote:

"...but I doubt very much it has anything to do with CRA..."

Ben claims he was instrumental in forcing the change!

His exact quote:

"My push with my mp's influence has help to bring about the changes. Enough
businesses have been claiming the itc on their ebay fees it has force ebay
to comply with the CRA."

---

Who is Ben? Is that the coin guy? If so, he's blowing smoke as usual! I suppose he'll next claim he did the same thing in Australia and India!!!!

Maybe it was Dexter!!!!

[pjcdn2005]

lol The infamous Dexter!

And yes, Ben is the coin guy.

[cumos55]

If someone was assuming that eBay was ... including the HST in the fees, and was using this amount was an ITC.  in their reporting of Tax collected relative to ITC

Then ......CRA will be interested in auditing that seller if only to collect back taxes.....  as much as 6 years of back taxes....

Now it will be obvious that the tax will be ... added to the invoice as a separate entry.

So... who will not want to be audited.... or have they already been audited...and had to pay up...for doing the wrong thing.

Will CRA check to see who has been making that assumption.... Taxes included ... in...  the fees total   as had been recommended by someone...... in error.

Wonder if CRA is ... reading... this discussion.....

[tyler@ebay]

Hey everyone,

Due to the length of time that has passed since this thread began I have locked it from future replies. If this is still an issue that warrants discussion, don't hesitate to begin a new thread!