Recording GST/HST on eBay customer invoices

[rose-dee]

Oh, this is a boring topic, no question, but for those of you who are GST/HST registrants, I'm curious to know how you record the GST/HST on your eBay buyers'  invoices or packing slips, etc.   Maybe 'femmefan'?  Or 'pierre' if you're still lurking around out there?

I'll be registering shortly.  Since I sell so few items to Canadians, I plan to simply include the required GST/HST in the listed price (in effect, paying it out of my own pocket so I don't have to charge GST/HST to buyers on top of the listed price).  I'd like to be able to show the customer I've given them this courtesy.  I'm thinking of either an asterisk and note on the invoice/packing slip indicating that GST/HST of $XXX has been paid by the seller and is included in the stated price,  or making up a custom invoice/packing slip for my Canadian buyers breaking out the figures.   

Unless I've missed it amongst eBay's maze of seller preferences, I don't believe there is a way to automate this into the eBay invoice for particular buyers (or is there?).  

On a related question, would it be wise to advertise "GST/HST included for Canadian buyers" in the listings themselves?  Do any of you who are GST registrants do this?  Pros/cons?

I'm not asking about breaking these figures down for accounting and CRA reporting purposes, (which I know how to do), but how to best let the buyer see the figures.   Thanks in advance!

[cumos55]

Go to

Selling  Preferences.... then... Payment from buyers... then Use Sales Tax Table....

This sales Tax table will work  if you do not sell books.

Books are exempt from the provincial component of HST... except for Newfoundland

For everyone except book sellers (like me)   the GST and HST are the same for the item sold  and the  cost of postage....

My statement....

 Canadian residents --- The applicable rates for PST and GST/HST are included in all prices.

is included in all listings .....and on all invoices......

[cumos55]

I looked at your listings...... and you do not sell books...

This means the Sales Tax table should work for you

The tax is GST = 5 % for all provinces except for Ontario where HST = 13 %   and then for New Brunswick, Prince Edward Island, Nova Scotia  and Newfoundland  where HST = 15 %.

Welcome to the new reality of GST/HST

[fashionoutletdeal]

As far as i know if you dont charge your customers do not set your tax table .

Your invoices must show that the tax is included in the price.Then every month you will need to sort them out and calculate  when you make your GST/PST/HST .Its a lot of paper work  prepare yourself 

[ypdc_dennis]

Looking at an Pierre J. LeBel eBay stamp invoice from 2014.

He used a custom invoice with lines for taxes GST and HST with values of $0.00 -- the taxes were "free" to the eBay buyer and the sales tax accounting was all handled on his side.

...

Using the eBay tax tables as others suggest would make "taxes included" difficult to manage.

-..-

[pierrelebel · Accepted solution]

rose-dee - I totally agree with your policy to not charge GST/HST extra to your Canadian customers on taxable transactions.

In the good old days (before my retirement and cancellation of my GST/HST registration) I would always (no exception ever) send a printed invoice (using MS-Excel template) to my buyers, regardless of location.

My GST/HST registration number was printed on the invoice (that is a legal requirement for your Canadian customers on taxable transactions).

The invoice would read GST/HST included if applicable (I pay it for you).

As far as reporting to the federal government, based on your indication that Canadian sales represent a small percentage of your overall sales, I suggest you simply use an average. KISS.

For example, if your annual sales are $50,000 and 10% of that is within Canada ($5,000) it would cost you $500 in HST/GST that you absorb.  How did I come with 10% average.  From NS (HST 15%) look at your sales to the Maritimes (15%) Ontario (13%) rest of the country (5%) and you will find a weighted by population average of 10% (give or take a small fraction).

If you want to waste hours, do the calculation of each sale.... I guarantee you the overall annual results will be similar.

That method of calculation does not work if you are located in Quebec (they have weird rules down there).

As far as my listings on eBay (and my website) the message was simple: NO extra tax (GST/HST) for Canadian residents.

Good Luck.

[rose-dee]

Thank you so much 'pierre' and others who responded.  

Pierre, I'll take your advice and show "GST/HST included" on my Canadian buyers' invoices.  I actually won't have a problem breaking out the tax figures at the end of the year for CRA reporting purposes, because I'll be keeping my own records of the tax breakdown as the transactions occur.   There are unlikely to be more than a couple of dozen Canadian sales in a year anyway, but I'll keep your suggestion in mind regarding averaging the tax percentage.   I am aware I have to quote my GST/HST registration number on invoices to Canadian buyers.  

I can't see the need to use eBay's tax tables for my listings if I'm going to be including the GST/HST in my Canadian buyers' purchase price.  If I did use the tax table, it seems to me I'd end up with a bit of a muddle on the invoices and/or have to refund the tax charged to my buyer that was over and above the listed purchase price.  

I'm just hoping the hassle of registering and reporting is going to be worth the ITCs I'll be eligible for. 

By the way, did you advertise "GST/HST included" in your listings when you offered this?  I'm wondering if it's wise for me to do so, given that well over 90% of my sales are to the U.S. and overseas.  I wouldn't want those buyers to get the impression that I was including some sort of tax in their own purchases, i.e. if they assumed I was referring to customs taxes or duties.   (I think I may have answered my own question, but I'd be interested to hear from other sellers on whether they've advertised "GST included" in their listings or not, and why). 

[rose-dee]

---

wrote:

As far as my listings on eBay (and my website) the message was simple: NO extra tax (GST/HST) for Canadian residents.

---

Sorry Pierre, I see you answered my question about advertising.  

[pierrelebel]

Good afternoon.

"did you advertise "GST/HST included""

Not quite.  My listings read "No GST/HST added for Canadian residents" - eliminating questions from foreign buyers about tax rebate.

[ricarmic]

Rose just a quick clarification to: show "GST/HST included" comment.

Pierre mentioned it, but incase you missed it, on your invoice you also have to include your GST number as well as the comment about it being included, perhaps something like "GST/HST included (HST number RT001 123456789)".