CPC charging incorrect HST/GST

[atpro_powerclean]

PayPal appears to be charging the incorrect HST/GST on the shipping labels to Ontario.

IE:

Ship From:

British Columbia 

Ship To:
Ontario

Shipping Status: Shipped
Label Purchase Date: 19-Jan-2016
Carrier: Canada Post
Service Type: Xpresspost (1 - 3 business days)

Signature Confirmation: No

GST/HST: $2.60 CAD
Total Shipping Cost: $19.92 CAD

Last time I checked 13% of $19.92 was $2.29 not $2.60. If I use my tax code for NS it works out perfectly @ 15%.

This is the second time I've been charged 15% HST to Ontario instead of 13%.

I don't think this is correct anyone else confirm?

Cheers

[pierrelebel]

The method of calculation of GST or HST is correct.

Different rates apply depending on the type of service selected.

For example while Canada Post will charge GST or HST based on the province of the recipient (buyer) for some services, it will charge GST or HST based on the province of the shipper (seller) in other instances.

That is the way the tax laws are written

If you have a few minutes, go to the Canada Post website.

Select different locations as a shipper and other provinces as the recipient.

Take a close look at the tax charged for Xpresspost and regular parcel.  Do you see the difference?  Different rates apply!

Only in Canada, eh!

If you have a few minutes to spare, please take a look at:

https://www.canadapost.ca/cpo/mc/personal/productsservices/collectionofsalestax.jsf

[atpro_powerclean]

Thanks for the link, I did read that before posting but I'm still missing something...

I read:

Tax rules relating to interprovincial Priority™, Xpresspost™ and (commercial) Parcel services are as follows:

• subject to HST if mailed to Ontario, Prince Edward Island, New Brunswick, Nova Scotia or Newfoundland and Labrador regardless of total price per transaction
• subject to GST only if mailed to the other provinces and territories.

My limited understanding of the GST/HST tax rates is in most scenarios you charge the rate of the province that will be receiving the goods. So now this really confuses me if the shipping rate is different between the product and the shipping.

I consider HST and GST to be exactly the same tax (federal sales tax), and I collect based on the federal tax rate of the province. It doesn't matter if it's HST or GST it's the federal portion of the sales tax one is harmonized with the province, the other is not.

On the order that shipped to Ontario above, I collected the Ontario rate of 13% HST on the product and 13% HST for the shipping but I paid 15% HST, the NS rate, when I ship XPresspost to Ontario??

It really makes no difference to me since it becomes an input tax credit but it doesn't seem right and I can't find anywhere in the tax rules where an Ontario resident/business has to pay the HST rate of Nova Scotia on mail or freight.

Cheers

[atpro_powerclean]

My last statement is not entirely how I meant it... "I can't find anywhere in the tax rules where an Ontario resident/business has to pay the HST rate of Nova Scotia on mail or freight." 

An Ontario resident or business would pay the HST rate for Nova Scotia to Canada Post when they shipped a product from Ontario to Nova Scotia.

What I should have said is:

I can't find anywhere in the tax rules where a BC resident/business has to pay the HST rate of Nova Scotia to Canada Post on mail or freight to Ontario.

Cheers

[atpro_powerclean]

I found this too but I still don't see the rates...

https://www.canadapost.ca/web/en/kb/details.page?article=collecting_sales_tax&cattype=kb&cat=general...

[pierrelebel]

"understanding of the GST/HST tax rates is in most scenarios you charge the rate of the province that will be receiving the goods"

That is generally correct EXCEPT for postal rates charged by Canada Post.

For example, a small box (1.9K) going from BC to ON, the tax would be charged as follows:

regular parcel : 5% (the GST rate in BC - same as if you had purchased postage stamps)

Xpresspost: : 13% (the HST rate applicable to Ontario)

Priority: : 13% (the HST rate applicable to Ontario)

As suggested earlier, please take a few minutes to test the many possibilities using Canada Post website.

Now, how Canada Post charges the tax does not change how a GST/HST registered seller should calculate the tax: it is always based on the province of the buyer (recipient), including the shipping charge, regardless how it was shipped.

[atpro_powerclean]

Well, it makes no real difference to me how they calculate the tax rates. I only pay the difference so it is what it is eh?

I'm sure there's a well paid team of various professions that are able to keep track of it all and ensure the system runs smooth.

Cheers

[atpro_powerclean]

NO.

They are definitely overcharging the HST.

There is no explanation for this one:

Ship From:
Delta, British Columbia 



Ship To:
hunts point, Nova Scotia
Canada

Shipping Status: Shipped
Label Purchase Date: 21-Jan-2016 10:46:07 GMT-05:00
Carrier: Canada Post
Service Type: Expedited Parcel (1 - 7 business days)


Signature Confirmation: No

GST/HST: $2.65 CAD
Total Shipping Cost: $18.22 CAD

Insured Value:
Planned Mailing Date: 21-Jan-2016

Since when is the HST 17% to Nova Scotia? and 15% to Ontario.

Unless it's just me. They have the tax codes wrong on their end. Again, I get it back in a credit so I don't care too much but it's wrong.

Cheers

[pierrelebel]

Please provide ALL the information

postage

fuel surcharge

tax

[atpro_powerclean]

That is ALL of it!

That is the receipt from PayPal and there is no other information ie: surcharge.

I know the Canada Post website has the surcharge but it is my understanding that the surcharge is subject to federal sales tax and should be built into the subtotal.

Cheers

[atpro_powerclean]

PS: I have been shipping via PayPal for a long time and this has only come up in the last week or so. My tax codes that normally work for making up my purchase invoices to Canada Post no longer match. I have to add 2% ie: Ontario 15% Nova Scotia 17%.

cheers

[pjcdn2005]

When you do your label they should be a top number which is supposed to be the small business rate, then the discounts, gst and the total that you pay.  I don't have it in front of me but that's the general information that you should see. Is it possible that the gst is being figured out on the total before the discount? There would have been changes made on the calculator when prices went up so perhaps the gst calculation got changed by mistake.

[atpro_powerclean]

I've been going off the email receipt from PayPal:

"You created a shipping label..."

The next domestic label I print I'll check it out as you say and get the breakdown of the charges... There is no way to go back and see the discounts, surcharges, taxes, etc. once you close the page after printing. All we get is the email receipt with the total shipping cost and taxes charged.

When I make up the purchase invoice in my accounting software I have a tax code for each "province" and the rate.

ie: 13% on, nl, nb, and I have 15%  for ns, 5% for GST provinces and so on...

In the last couple weeks my tax codes don't match. Once I deduct the taxes charged from the total shipping cost on the receipt it is 2% higher than the provinces tax rate.

Go back up to the top and do the math.

The first shipment was to Ontario. Should be 13% HST paid. 

On the receipt:

Total cost: $19.92

GST/HST Paid: $2.60

Math:

Subtract $2.60 from total paid $19.92 = $17.32

$17.32 x 1.13 (hst rate for ontario) = $19.57

Total Cost is $19.92... it doesn't work.

UNLESS:

Take 17.32 (subtotal before tax)

Multiply but 15%

$17.32 x 1.15 (2% higher than ontario hst rate)

= $19.92

Do the same math for my second example and I paid 17% HST to ship to Nova Scotia and not the 15% tax rate for the province.

PayPal / Canada Post are over charging the taxes. If you don't have a registered business you will never get this money back.

Of course, I'm posting here for peer review in case I'm out to lunch 😛

Cheers

[atpro_powerclean]

I got a new order to Ontario.

HST Rate in Ontario is 13%

$12.24 x 1.13 = $13.83.

I paid 15% to ship to ONTARIO

$12.24 x 1.15 = $14.08

[pjcdn2005]

I'm stumped. Unless I'm missing something, it does look as if they are charging too much tax.

[pierrelebel]

When I check Canada Post website CP always charges the correct rate and the tax calculation is correct based on the appropriate rate.

My experience with Canada Post offices or outlets has always been consistent: the rate charged and the tax calculations based on the appropriate rate have always been accurate.

You are using PayPal shipping.  The program is administered by Pitney Bowes on behalf of eBay while the charges are charged to your PayPal account.

When i checked the weight and measurement you offered,

Canada Post charges 5% GSP from BC to ON for regular parcel (or Expedited for business with Venture One card) The tax is calculated on the total amount of shipping charge and fuel surcharge

Canada Post charges 13% HSP from BC to ON for Xpresspost or Priority services The tax is calculated on the total amount of shipping charge and fuel surcharge

Why Pitney Bowes charges a different rate to you on your shipping label I simply do not know.  I am confident there is an explanation.  I simply do not know it.

It is a question worth investigating with eBay-Canada

[ypdc_dennis]

---

@pjcdn2005 wrote:

I'm stumped. Unless I'm missing something, it does look as if they are charging too much tax.

---

From your example it does look like Pitney Bowes (via paypal has screwed up the tax rate calculation).

Even if Pitney Bowes calculated the tax based on the undiscounted amount it's still too high (1.81 vs 1.84).

-.-

[decal-fx]

ypdc_dennis beat me to that conclusion

[atpro_powerclean]

Still happening... 

Two shipments from BC to Ontario and 1 to NS and both Ontario parcels had 15% HST charged and the NS shipment had 17% charged...

Am I the only one charged these rates? No one else has noticed?

[pierrelebel]

I raised the question on Wednesday Board Hour.  This is the reply I received from eBay-Canada staff:

"This is interesting to say the least.

I'll alert my contacts at PB, PayPal and Canada Post. I would argue though that PayPal being the payment handler in this situation, they are the ones responsible for applying tax appropriately."

Typical pass the buck!

"No one else has noticed?"

Maybe you should address the question on the Selling on eBay board.  Few sellers regularly frequent the PowerSeller board.

In addition I would address the question directly to Kevin on the next Wednesday Board Hour.  You may be lucky and get an answer.