Why do Canadian shippers to the USA pay a VAT tax on our seller account

[blackvelvetvintage]

Why do Canadian shippers to the USA pay a VAT tax on our seller account?

I pay 32.40 C for my USA store as a Canadian. I was told that the store is 21.95 US and that would make it $29.40 US and then Ebay.com adds a Vat tax of 3.18 Why do we Canadians pay a Vat Tax

[ypdc_dennis]

Canadians have paid sales tax on all ebay fees since July 2017.

GST/HST is a VAT style sales tax.

If you are registered for GST/HST then the cost is subtracted from the sales tax you collect on Canadian sales (the difference if positive is paid to the government, or if negative refunded back to you by the government).

...

If not registered the tax is treated as selling expense.

Sidenote:

Currently it makes more financial sense to have an eBay.CA store as the store fee is charged in Canadian $ and does not have a exchange conversion cost added. The free store listings are good on both sites.

-..-

[blackvelvetvintage]

Thank you so much for your response. It was after my question that my cousin and I figured out (she is also a  Canadian shipper on the US site, however she doesn't have a store) that the Vat tax was a GST/HST tax.

How much do you pay for a Canadian Ebay store? I have sold on the USA site since 2006, I have always enjoyed getting paid with the US$.

[ypdc_dennis]

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@blackvelvetvintage wrote:

Thank you so much for your response. It was after my question that my cousin and I figured out (she is also a  Canadian shipper on the US site, however she doesn't have a store) that the Vat tax was a GST/HST tax.

How much do you pay for a Canadian Ebay store? I have sold on the USA site since 2006, I have always enjoyed getting paid with the US$.

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Until the spring of 2018 the rates were identical (except .CA was in Canadian $ and .COM was in US $).

Then eBay.COM added 2 new store levels and increased the fees. Supposedly, eBay.CA will have these store changes sometime in 2019.

https://www.ebay.ca/pages/help/sell/storefees.html

https://www.ebay.com/help/selling/fees-credits-invoices/store-fees?id=4122

[lotzofuniquegoodies]

You would think if you were using the dot com site you would be billed with some sort of an applicable US tax vs GST &/or a Provincial Tax. Similar to when you go to the States and buy a toaster. State tax gets added. Just another creative tax grab I guess. Also when you ship to the USA no tax added to postage. Ship anywhere in Canada tax gets added.

-CM

[recped]

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@lotzofuniquegoodies wrote:

You would think if you were using the dot com site you would be billed with some sort of an applicable US tax vs GST &/or a Provincial Tax. Similar to when you go to the States and buy a toaster. State tax gets added. Just another creative tax grab I guess. Also when you ship to the USA no tax added to postage. Ship anywhere in Canada tax gets added.

-CM

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If your seller account is registered in Canada your fees are billed by eBay CANADA, where the listings are placed is irrelevant. What matters is that both the provider of services (eBay) and the buyer of said services are in Canada and therefore subject to GST.

Prior to 2017 Canadian eBay sellers were billed by eBay Luxembourg and therefore were not subject to GST. In 2017 eBay restructured their International operations and local billing began.

[lotzofuniquegoodies]

Understood. But also was a way for the Canadian Government to collect a tax on something they couldn't in the past. And you know how governments hate missing out on a tax grab!! Sadly nothing Joe or Judy seller can do about it but just pay it!!!

Personally, I've just never been big on the concept of having to pay taxes on USED ITEMS. You paid once. You are now done or the way it should be.  And a very large percentage of eBay items are used. You have a yard sale, you're good. Have many yard sales and now you are supposed to collect and pay taxes on those items. Whole other can of worms.

-CM

[reallynicestamps]

I believe the ON tax-free level is $30, 000 gross, before a seller is required to register to collect and REMIT taxes.

EBay is well above that level and must remit.

If a seller is registered to remit taxes, she can also claim credits on GST/HST/PST paid out to suppliers and on items shipped outside of Canada.

And the seller gets a small rebate just for making out the tax forms and dropping them off, with the monthly cheque. So you can get paid for paying /processing taxes!

@pierrelebelhas always been our tax guru.

[recped]

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@lotzofuniquegoodies wrote:

Understood. But also was a way for the Canadian Government to collect a tax on something they couldn't in the past. And you know how governments hate missing out on a tax grab!! Sadly nothing Joe or Judy seller can do about it but just pay it!!!

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How about over-payments of tax? Until eBay registered in Canada they could not recover any of the GST they paid to operate in Canada, GST paid on rent, marketing expenses, advertising, contract staff etc. etc. etc.

In any event, it's hardly a "tax grab" to close a loophole that existed for eBay sellers that did not apply to Canadian based marketplaces.

[reallynicestamps]

Edit -- two years later.

I have been told that since I was remitting ON sales taxes that businesses are not longer given a small discount on the amount of tax sent to the government as a sort of fee or wage for filling in the paperwork.

[tyler@ebay]

Hi 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!