Any way to avoid GST/HST for items mailed to me from the US?
Summary: treadstone68 is considering selling their uncle's coin collection on eBay from Canada, but is concerned about incurring HST/GST taxes since the items would be shipped from the US. recped explains that there are no exemptions for commercial items, and highlights the fees associated with different shipping methods. byto253 suggests listing the items on eBay's US site and having the uncle ship directly from Florida. ilikehockeyjerseys advises considering if selling the collection is a business, which may require GST registration, and suggests buying the collection outright from the uncle to simplify the transaction. reallynicestamps proposes sending the items in small batches to reduce risk and potentially avoid duty fees. They also discuss the importance of getting the collection properly appraised.
I have an uncle in Florida who heard I was selling stuff on eBay, and he asked if I would sell his coin collection on his behalf since he doesn't know anything about computers and eBay. From what I have read, I'll get charged HST/GST on any 'gift' entering Canada based on the value of the item. I am pretty sure my uncle would not be up to lying about the box's contents and value, and I am pretty sure he would not send his collection through the mail uninsured. Is there any way around this, or some sort of customs form to fill out that says the item is coming to me just to be sold (if there is even an exemption for that)??
reallynicestamps
·2 years agoand I am pretty sure he would not send his collection through the mail uninsured.
What value does he put on his collection?
Has he ever had it appraised? For what purpose? Insurance, estate, and cash value appraisals will vary wildly yet all could be correct on the same collection.
If he pays for an appraisal, he should be asked to stay during the appraisal. This is for the appraiser's security, not for his. OTOH if the appraiser does not want him there during the appraisal, I would be concerned.
Before we retired, DH was buying several philatelic estates every week. Our question, when told that the collection was large was "Will it fill a station wagon?"
Our biggest filled three storage units in BC which were shipped to Ottawa.
It was nowhere near the most valuable, but the heirs were happy even after all expenses.
The auction house has recently changed hands, and does not do coins, but they are negotiating with an experienced numismatic lotter.
https://stampauctionnetwork.com/IK/IK50.cfm
reallynicestamps
·2 years agoAnother thought.
If your uncle sends you the collection in small selections (not all at once) you will be able to keep up with listing (and selling and shipping) more easily.
While postage overall will cost more, the chances of losing the entire collection, already low, will be even lower.
And the shipments may come in under the $150Cdn/$112.50USD duty free allowance and the $40Cdn/$30USD taxfree allowance for postal shipments .
I'm not sure how the $60Cdn /$45 USD "gift" duty free allowance comes in on this, but this transaction doesn't meet the standard for a gift.
Your uncle might find this useful -- tell him that the cheapest shipping is at the bottom of the rate card First Class International Package which includes tracking and some insurance.
https://postcalc.usps.com/?country=10440
There is also something about no duty/no sale tax on "bullion" but I am not clear on what that is, and I don't think that it applies to coins and medallions. Perhaps a coin dealer could fill you in on that.
ilikehockeyjerseys
·2 years agoIf you sell on eBay with a reasonable expectation of profit, it is advisable to claim your profits as income. In which case, you should consider registering to collect GST, even if you are still under the small supplier threshold. Because eBay will collect GST regardless, you can then capture any GST you spend on business activities as an input tax credit and have it refunded back to you.
In the event that this is a business arrangement (consignment) and you are registered for GST, you could simply claim the tax on the items as an input tax credit. Minus the $9.95 Canada Post will charge you if he sends it via USPS. I would not have him send it via UPS or Fedex unless this is a substantial collection that requires some level of service or insurance that USPS cannot offer. UPS or Fedex will charge substantial brokerage fees (not taxes). Canada Post only charges a $9.95 brokerage fee.
Selling a large and expensive collection for a friend or family member is a bit tricky these days. We are gone from the days where eBay is an online garage sale or the wild west as far as it pertains to things like income tax. You're always taking a risk selling personal stuff, and if you sell a large enough collection for a friend or a family member you risk the CRA coming after you for income tax related to that. If this isn't a business transaction where he is going to give you a reasonable consignment fee, and you're going to do everything by the book, I would consider looking for a coin business local to him that has a good reputation and can offer consignment.
On a side note, if this is a consignment type deal, I would consider simply buying the collection from him. Share with him the realities of selling on eBay as far as the cost structure goes, and let him know how much you will get for the amount of work you will put in. Then give him a number you think is fair for both of you. Consignment with friends or family can lead to lots of problems, especially on eBay where things can go bad with transactions as far as returns, chargebacks, etc.
https://www.cbsa-asfc.gc.ca/contact/bis-sif-eng.html - You could also contact the CBSA directly and ask them what the proper way is to handle a situation like this in terms of preparing the item for import.
Keep in mind, I'm not a lawyer or an accountant. The above isn't professional accounting or law advice, just riffing based on my experiences as an eBay seller.
treadstone68
OP2 years agoThanks for the very informative response. I wasn't aware of the GST/HST tax credit aspect, although I am a little weary of how much extra complexity it might add to my tax return. I like the idea of simply having my uncle ship the items from his location, but he is getting old and I worry that him forgetting, or shipping something late, will ultimately affect my rating on ebay. Lots to ponder.
Seems like Free Trade between the US and Canada is in name only.
marnotom!
·2 years agoFree trade is about duties, not taxes. Otherwise we wouldn’t have to pay sales taxes on items purchased from Canadian brick and mortar retailers that were made in the United States or Mexico.
Or a lot of other items from various countries, for that matter.
ilikehockeyjerseys
·2 years agoMy advice would be to try and find him a reputable consignment shop in the USA, or even a hobby shop that might buy his collection at a fair resale price. Which if coins are like most other hobbies, won't be anywhere near what he might get if he sells it on eBay after fees, but would save you guys the liability and the headache.
Or to simply buy the collection outright from him for an amount that you both think is fair that could allow you to feel comfortable enough that you could recoup it, provide him with some cash, and keep things on the up and up if you are ever audited. Generally, that's the best thing to always do when it comes to eBay with family and friends. Not that you want to rip off a family member and make big money off their stuff, but there is less chance for hard feelings if a transaction goes wrong. It's easier to manage from a business POV if you own and have full control over the inventory. Sometimes with consignment people do not have a realistic idea of what their stuff should sell for. The last thing you want to do is put in loads of work to catalogue, photograph, and list stuff - only to have a family member refuse to let you price it appropriately, and it will never sell.
Best of luck.
byto253
·2 years agoNot an answer to the question, but an alternative suggestion. For his coin collection, I would list on .com and have him ship out the sold items directly himself. You would add his address to your addresses in eBay and for those listing change the item location to the Florida location. This would be true and legit. You can then use the eBay USPS labels from .com which will cheaper and you will not have to deal with customs.
Payouts will be as usual to the bank account and currency you already have set up. If that is CDN$ you will have the eBay conversion fee but IMHO worth it to avoid the shipping to you, then you shipping them out.
Your uncle would need to take pictures for you as well. But you would decide the best way to sell the coins i.e. which are individual and which as a group, then he would take pictures of those. I don't think taking pictures of coins, and shipping them is to much trouble when you take care of the rest.
recped
·2 years agoHere is the official policy
https://www.cbsa-asfc.gc.ca/import/courier/menu-eng.html
Because of the small amount of taxes collected on shipments of relatively low value many packages that are over the limit just sail on through with no taxes applied. That is however not something you should rely upon.
Of course what you are describing is not really a legitimate gift so you might be limited to the $20 exemption.
Be aware, if the package is sent through the postal system Canada Post will apply an additional fee of $9.95, if the package is shipped by a private carrier (UPS, FedEx etc.) then they will also apply a fee for processing and fronting the money they have to pay out to customs on your behalf, that fee will definitely be higher than Canada Post.
FYI - If the goods are for commercial use like reselling there is ZERO exemption. Any GST/HST paid is recoverable IF you are registered with CRA to collect GST on your Canadian sales (optional if your gross sales are under $30,000/year).