Canadian sellers to be charged GST/HST/QST on all fees effective July 1 2017?

[snoopwiz]

As part of the Summer 2017 update, eBay has announced the following.   You will see all updates in the email they are sending.

Today, eBay announced changes that will impact Canadian residents and businesses who use eBay.

To better reflect how we manage and operate our platform in Canada, on July 1st, 2017 we will be changing the contracting party for Canadian residents and businesses from eBay International AG to eBay Canada Limited, a Canadian corporation.

As a result, eBay users residing in Canada will begin contracting with eBay Canada Limited. This change will impact these users' User Agreement, User Privacy Notice, Billing Agreement, and other agreements with eBay.

The new contracting entity, eBay Canada Limited, is subject to Canadian tax law. As a result, sales tax (GST/HST/QST) will be charged on eBay fees starting July 1st, 2017. The applicable sales tax rate will vary by province, which we will determined based on your registered eBay address. You should confirm that your registered address is correct. The current applicable tax rates are:

Province	Rate
Alberta (AB):	5.00%
British Columbia (BC):	5.00%
Manitoba (MB):	5.00%
New Brunswick (NB):	15.00%
Newfoundland and Labrador (NL):	15.00%
Northwest Territories (NT):	5.00%
Nova Scotia (NS):	15.00%
Nunavut (NU):	5.00%
Ontario (ON):	13.00%
Prince Edward Island (PE):	15.00%
Quebec (QC):	14.75%
Saskatchewan (SK):	5.00%
Yukon (YT):	5.00%

While the addition of GST/HST/QST on fees is new, eBay's prices will not change as a results of this legal entity change. Furthermore, you should see no interruption in your service as a result of this change, and you will not need to make any updates to your listings.

If you are a business user, we recommend that you consult with your tax advisor to understand your eligibility and the process for claiming an input tax credit on tax paid for services provided to your business.

[chiditta]

Does this mean a seller living in the east will be paying at least 24% charge before even paying PayPal fees? 

[ricarmic]

I will be interesting to see how us legacy folks get counted......and if it works correctly for us....

[pierrelebel]

NO.

It means that if you are a seller living in Quebec (for example) eBay-Canada will charge you 14.75% HST (according to their table) on the fees payable - NOT on the value of the item.

So if the fees are $10.00, eBay will add $1.48 HST for a total of $11.48

[snoopwiz]

If you are in one of the Maritime provinces.......

If you have an eBay store, you will be paying the 15% HST on whatever amount it is you pay for your store. 

If you are charged 30 cents a listing, ebay will be charging/collecting.submitting 15% HST on that, equaling 4.5 cents

If you sell an item for, lets say, $10.00,  and your final value fees are, lets say 90 cents, they will charge/collect 15% HST on that, equaling 13.5 cents.

Etc.

I think. 

[pierrelebel]

"...how us legacy folks get counted..."

In my opinion, "legacy" status has nothing to do with taxes.

GST/HST will be charged to Canadian sellers regardless if they list on eBay.ca or eBay.com.

[ricarmic]

Hi Pierre!

What I really meant was that I hope their automagic billing process understands that I'm Canadian and in Ontario and charges the taxes correctly despite the fact I'm a legacy user.

Being legacy, as you know, sometimes has us being treated differently....time will tell!

[pierrelebel]

Since you are GST/HST registered, the change will have no real net effect on you and all other Canadian sellers registered with GST/HST..

Whatever tax is charged on eBay fees become an identical Input Tax Credit (ITC).

[ricarmic]

Yep! (that's why I really don't "care")

The taxes should be spelled out on the monthly invoice.

I'm surprised it took this long for eBay to have to do something that resulted in the taxes being recovered....it is probably a good sized number!

[musicyouneed]

So what does that mean for a small seller who currently sells maybe $6,000 a year and about 40% to Canada.  So is ebay collecting the tax from the buyer or the seller or does it become even more complicated where I have to remit the sales tax?  

[ypdc_dennis]

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@musicyouneed wrote:

So what does that mean for a small seller who currently sells maybe $6,000 a year and about 40% to Canada.  So is ebay collecting the tax from the buyer or the seller or does it become even more complicated where I have to remit the sales tax?  

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eBay would be collecting taxes on the FEES that eBay charges you (currently exempt, since the fees are charged through eBay Switzerland).

Nothing to do with collection of tax on the sale.

[ricarmic]

(YPDC was faster on the draw than me!!!!)

Hi Music you are misunderstanding what this is.

This is eBay charging you the relevant GST/HST/QST on the ebay fees that you pay to ebay from selling here. It has nothing to do with the taxes collected by you (aka sellers) around the actual item itself.

As Pierre pointed out, this has no effect on those registered. For folks not registered for GST/HST/QST it means your ebay fees selling cost each month went up by the relevant tax rate for your location.

[pierrelebel]

"I'm surprised it took this long for eBay to have to do something..."

Now, this one is a real puzzle.

Way back at the beginning of eBay-Canada seventeen years ago, eBay convinced CRA that the service they provided was not eligible to taxation (GST) in Canada since the service was provided in the USA, on servers located in California.  CRA agreed and provided eBay with a ruling to that effect.

It had NOTHING to do with where ownership of eBay-Canada was located (Switzerland, USA or Timbuctoo).  As far as GST is concerned, the only criteria to determine if a service is taxable or not is where is the service provided.  In this case, USA.

Now eBay is telling us that the service will be contracted to eBay-Canada.  Quite frankly I do not believe for one second that eBay is being honest with us on the subject.  The servers are still in California!

I understand that the service will now be taxable but... there is more to that decision then simply changing the legal location of ownership from Switzerland to Canada.  But again, we all know eBay does not have a reputation for candour.

Too bad eBay no longer has that weekly Wednesday session.  I would have had some fun!

And life does go on.

[musicyouneed]

So the fees for my store and the fees paid to ebay and paypal would be taxed at 5% if I live in BC?  So if I pay $100 in ebay fees for the month, I would pay an extra 5% or $5.00 to whom?

[pierrelebel]

"So the fees for my store and the fees paid to ebay and paypal would be taxed at 5% if I live in BC? "

NO.

Only the fees charged by eBay are taxable.

Fees charged by PayPal are still deemed to be non taxable

" I would pay an extra 5% or $5.00 to whom?"

The fees will be payable to eBay on their invoice.  eBay will remit to CRA.

[Anonymous]

Hi folks.

That's correct - the impact of this change is that the fees assessed to you by eBay will be assessed by eBay Canada Ltd instead of eBay International AG (Switzerland), which means the seller fees themselves will become subject to Canadian sales taxes.

• This change will have no impact on the sales tax you collect from buyers as part of your ebay transactions. It only impacts the fees that eBay charges you, the seller.
  
  
• This has nothing to do with your choice of listing site. It has to do with your registration address. If you list on any eBay site, and you registered using a Canadian address, the any sellers fees you incur on eBay will be subject to ordinary sales tax, based on your Province of residence. So if you list on the Italian eBay site, and sell something to an Australian who buys the item on the German site, your seller fees for the listing and the sale will still be assessed by eBay Canada Ltd and will still be subject to Canadian tax, y virtue of your registration address.

[cumos55]

Remember that discussion we had a few years back....   about eBay fees and GST/HST.

Now everything has been cleared up.

[bert1630]

So the guy in Quebec who owns a business,buys a box of cards and pays HST & PST on his purchase.Now he sells his cards and because he is a business he adds HST & PST onto his sales.Now I as a good customer of guy in Quebec and a paying HST & PST customer decide to sell my spare cards on ebay.Ebay wants to charge me HST & PST on cards that have already been taxed TWICE.When does this BS end.

[pierrelebel]

bert - there is NO CHANGE WHATSOEVER on the taxation of the products from wherever they come.

The change only affects tax (GST/HST) on the fees paid by sellers to eBay..  Nothing else.

[dutchman48]

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@Anonymous wrote:

Hi folks.

That's correct - the impact of this change is that the fees assessed to you by eBay will be assessed by eBay Canada Ltd instead of eBay International AG (Switzerland), which means the seller fees themselves will become subject to Canadian sales taxes.

• This change will have no impact on the sales tax you collect from buyers as part of your ebay transactions. It only impacts the fees that eBay charges you, the seller.
  
  
• This has nothing to do with your choice of listing site. It has to do with your registration address. If you list on any eBay site, and you registered using a Canadian address, the any sellers fees you incur on eBay will be subject to ordinary sales tax, based on your Province of residence. So if you list on the Italian eBay site, and sell something to an Australian who buys the item on the German site, your seller fees for the listing and the sale will still be assessed by eBay Canada Ltd and will still be subject to Canadian tax, y virtue of your registration address.

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Hi Rodney

Can we close our store without penalty. FVF go up, Discount goes down, and now taxing the store fees and FVF and I am sure that will be on shipping costs as well.

This is becoming a gouge as far as I am concerned.

Please let me know ASAP