New Management Payment looking for info

[33nhl]

Finally singed up to this new Ebay management payment and i think already time to leave ebay.

I could be wrong but im asking to see if any others have noticed this

Upon signing up and i just sold an item $1.50  and $3.00 shipping

Now cant see the old way what break down on the fees

I do see  S/H Fee but they name it differently and shows $0.30 plus 0.04 tax total 0.34 which is correct as it was in past

Now though the selling fee on that item of $1.50  they include it in the money transaction fee thus they are charging tax now on the money transfer between buyer and seller, but Paypal would never charge tax on the fee it charged for the transaction.

On the sale of $1.50 the fee is 0.15 plus tax so an extra 0.02

Ebay though is adding it with the transaction fee it charges thus 0.30 + % on the $4.50 and then charges tax on that total amount of both the selling fee and the payment transaction.

I could be wrong but i see charge ot $0.50 plus  $0.07 as tax total $0.57

Thus they are adding the selling fee and the money transaction fee then charge tax on that whole amount which should not be as oce again PAYPAL never charged tax on the fees.

Please let me now if this is correct or maybe im not doing the math work corectly

[pjcdn2005]

In your previous post when you are referring to tax...are you talking about tax on fees or was the buyer charged a tax? If so, how much was the tax that the buyer paid and where were they located?

But assuming that your buyer was in Canada and that you don't charge tax to your buyers this is what I think the breakdown of fees should be....

1.50 x 12.35% = .19

.19 x 13% hst - .03

3.00 x 12.35% = .37

.37 x 13%hst = .05

transaction fee . 30 x 13% = .34 

trs discount - .06   - I assume that we don't get the trs discount on the .30 or on tax so the discount would be 10 % of .56 (.37 + .19)

total fees  - .98 less .06 = .92

Does that help at all?  Hopefully I didn't make a mistake on the numbers. 

You are being charged hst on the .30 transaction fee which Paypal didnt do but ebay has charged hst on the fvf for shipping and fvf on the item for quite a while.  

If the transaction was done through PP...

ebay fvf - 4.50 x 10% = .45 x 13% = .51

Paypal charges - 4.50 x 2.9%  =  .13 + .30 = .43

Total fees - .94  before trs discount

trs  discount - 4.50 x 10% =.05 (note that discount was not on shipping but now it is with MP)

.94 - .05 = .89

[femmefan1946]

which Paypal didnt do but ebay has charged hst on the fvf for shipping and fvf on the item for quite a while.

Might this be because eBay Canada is registered in Canada, while PP remains a US company?

[kawartha-ephemera]

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@pjcdn2005 wrote:

In your previous post when you are referring to tax...are you talking about tax on fees or was the buyer charged a tax? If so, how much was the tax that the buyer paid and where were they located?

But assuming that your buyer was in Canada and that you don't charge tax to your buyers this is what I think the breakdown of fees should be....

1.50 x 12.35% = .19

.19 x 13% hst - .03

3.00 x 12.35% = .37

.37 x 13%hst = .05

transaction fee . 30 x 13% = .34 

trs discount - .06   - I assume that we don't get the trs discount on the .30 or on tax so the discount would be 10 % of .56 (.37 + .19)

total fees  - .98 less .06 = .92

Does that help at all?  Hopefully I didn't make a mistake on the numbers. 

You are being charged hst on the .30 transaction fee which Paypal didnt do but ebay has charged hst on the fvf for shipping and fvf on the item for quite a while.  

If the transaction was done through PP...

ebay fvf - 4.50 x 10% = .45 x 13% = .51

Paypal charges - 4.50 x 2.9%  =  .13 + .30 = .43

Total fees - .94  before trs discount

trs  discount - 4.50 x 10% =.05 (note that discount was not on shipping but now it is with MP)

I'll make a teeny weeny correction here just for the purpose of illustrating a point.

trs  discount - 1.50 x 10% =.015  (prior to MP the TRS discount was applied to the item price only, so the discount would have been only 0.015 cents, let's be generous and round that up to 0.02 cents)

.94 - .05 = .89

.94 - .02 = .92  In this example there is no advantage of one system over the other.

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[marnotom!]

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@femmefan1946 wrote:

which Paypal didnt do but ebay has charged hst on the fvf for shipping and fvf on the item for quite a while.

Might this be because eBay Canada is registered in Canada, while PP remains a US company?

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There is a PayPal Canada office in Toronto, but I don't know if it functions as a separate business entity:

https://dailyhive.com/toronto/paypal-new-toronto-office-photos-2017

[recped]

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@femmefan1946 wrote:

which Paypal didnt do but ebay has charged hst on the fvf for shipping and fvf on the item for quite a while.

Might this be because eBay Canada is registered in Canada, while PP remains a US company?

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No that is not the reason.

With PayPal it was a "financial service" and therefore zero-rated for GST/HST.

With eBay MP it's a mixed fee, partially (mostly) a fee for service with only a small portion a financial service. Because it's a mixed fee there is no way to seperate the financial service portion and therefore the entire fee is subject to GST/HST.

Add: PayPal Canada is just as much a Canadian company as eBay Canada is. In any event they operate in Canada and are subject to standard rules for GST/HST, ownership is in some ways irrelevant.

[33nhl]

It's the tax being a seller in Canada that when PayPal took its % in fees we didn't pay tax on that fee amount that PayPal took now though under Ebay management for that same transaction that PayPal did we will be paying tax on the fee. So if PayPal collected in a transaction say $25.00 in fees no tax was charged, now though on that $25 sellers in Canada be paying GST plus what ever extra tax rate per province they live in. So on that $25 fee add an other $2.60 tax GST and Ontario tax for sellers living in Ontario.
So that extra 2.60 will add up in the long on those doing big volumes sales, but it will be passed down to the buyers in which it will drive away buyers

[marnotom!]

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@33nhl wrote:

So that extra 2.60 will add up in the long on those doing big volumes sales, but it will be passed down to the buyers in which it will drive away buyers

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Most posts I've seen where a thorough calculation of fees has been done under the old PayPal system and under the new Managed Payments system show a pretty miniscule overall increase.  You might want to try crunching all the numbers involved instead of just focusing on one thing.

[recped]

The only increase in GST/HST is on what used to be the PayPal portion (2.9% + 30 cents).

In your example of total fees of $25 the Ontario HST amount $2.60 under Managed Payments, under the old system the amount of HST would have been approximately  $2.43 so the difference is < 20 cents not 2.60.

Yes 20 cents is an increase but you need to also consider MP fees overall are slightly lower than the old combined total under PayPal further reducing the HST increase by a couple of pennies.

For Sellers who are registered for GST/HST all those taxes are refundable balanced by the fact that when you charge GST/HST to buyers there are fees to pay on the amount collected to GST registrants don't get a completely free ride but the amount of those fees is less than a nickel on your example.

Sellers need to decide if even though they may be below the $30,000 threshold it might be to their advantage to register. Part of the decision making process is to determine what Input Tax Credits you are foregoing by not being GST registered and how charging GST to domestic buyers might or might not impact sales.

I have always charged GST to Canadian Buyers, years ago I had very few Canadian sales, that has increased a lot of the past 10 years but it's still a relative minority so the advantages of registration outweigh the disadvantages. In my own situation I don't really have the choice because I'm usually at or above the $30,000 line if not from eBay alone when considering other activities.