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.

[hlmacdon]

Yay more ITCs!

[cumos55]

Those of us that are already registered to collect GST/HST will not be negatively affected by the tax on eBay fees.  The tax becomes an ITC...

If the primary market is Canada, then the tax on eBay fees means less GST/HST is forwarded to CRA each year.

If the primary market is the US,  then the tax on eBay fees is totally or partially refunded..

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However,  Small sellers that are NOT registered to collect GST/HST will be influenced to some degree....

If an item sells for $10.00, and the eBay fee is 10 % of $10,  then the FVF is $1.00..... 

GST at 5 % is 5 cents on each dollar paid to eBay.

5 cents on $10,  is 0.5 % on the price of the item sold.... 

If HST is 13 %  then the tax on that $1.00 FVF becomes 13 cents..... 13 cents on $10  is 1.3 %

[cumos55]

For small sellers.....

In order to minimize the effect of the GST/HST paid on eBay fees.....  

Small sellers should perhaps register to collect GST/HST... and the tax on eBay fees  becomes an ITC....an Input Tax Credit

and... most important for small sellers where the primary market for sales is with US buyers.....

and most likely more important for sellers who live in HST Provinces..

...

GST or HST on eBay fees is calculated based on where the seller lives.

GST or HST on a sale is based on where a buyer lives

The Tax on eBay fees might  be totally or partially refunded.

More study with respect to book keeping   will be be needed

Something to think about and examine..... more fully and more carefully

This was a quick thought on my part.....  but ....it may work....  perhaps... maybe.....just a thought

[silverpinups]

However,  Small sellers that are NOT registered to collect GST/HST will be influenced to some degree....

Yes I agree, sellers who are not registered with GST/HST will be more affected than sellers who are registered to collect GST/HST.

Sellers who are registered get a ITC vs. Sellers that are not registered do not......

[cumos55]

The transition to eBay Canada Limited will be most interesting....

and it all starts with GST/HST........  and then everything else.

Our big change in 2016....  was from US to Canadian dollars on eBay Canada.

and now comes eBay Canada Limited....

Does this also mean that we as Canadian sellers will become more unique as a seller group on eBay worldwide....

Will our needs be addressed more quickly?

Will our problems, glitches and more be addressed more quickly...

[hlmacdon]

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@cumos55 wrote:

and... most important for small sellers where the primary market for sales is with US buyers.....

and most likely more important for sellers who live in HST Provinces..

...

GST or HST on eBay fees is calculated based on where the seller lives.

GST or HST on a sale is based on where a buyer lives

The Tax on eBay fees might  be totally or partially refunded.

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This is going to be a key for many small sellers that focus on the US/international market and otherwise have limited domestic sales. The benefits of being able to claim back the GST on fees as an ITC, plus all other ITCs that now become claimable make this a no brainer. If anything this may nudge some sellers into a more advantageous position.

[hlmacdon]

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@cumos55 wrote:

Does this also mean that we as Canadian sellers will become more unique as a seller group on eBay worldwide....

Will our needs be addressed more quickly?

Will our problems, glitches and more be addressed more quickly...

---

Doubtful. I would imagine this change came about due to lobbying and compliance issues rather than a desire to separate out business units to allow for more focus and a "local" touch.

[pierrelebel]

"this change came about due to lobbying and compliance issues"

I totally agree.

[rmtrmt]

How much of the tax does eBay.ca keep? I know they get something to cover cost of collecting tax.

[pierrelebel]

 Nothing.

Canadian registered GST/HST merchants do not get anything from the federal government to collect and remit the tax.

In the "good old days" merchants were getting a small commission (typically 2%) to collect PST.  No more.

[cumos55]

eBay.ca will be like all of us that collects GST/HST.

If the total we collect is greater than ITC, that amount is forwarded to CRA

If the total we collect is less than ITC   then CRA makes a refund of ITC

ITC = Input Tax Credit

CRA = Canada Revenue Agency

Now is the time for many to go to the CRA website and read about GST and HST... if only to get that first  reality of what to do

http://www.cra-arc.gc.ca/gsthst/

[cumos55]

A first introduction.to GST/HST

Quebec is unique with respect to GST/HST....

Sellers who live in Quebec will be charged a QST... a Quebec Sales Tax ... of 14,75 %. by eBay

Sellers who do not live in Quebec, and with buyers in Quebec charge a tax rate of 5 %,   that is a GST level, even though the charge of 14.75 % by eBay, is similar to the percentage for HST provinces.

Today is a first for many  who see that 14.75 % value for the first time,

[vintagenorth]

Sounds to me that it would be easier just to move to Alberta from Ontario! Only 5% tax there!

[lady.stark]

Are you kidding me?? They reduced the credit on FVF for PowerSellers by HALF, They increased FVF. And now they will charge me taxes on the fees I pay! I am so **bleep** right now I could yell!

There won't be any point to sell here anymore! They will eat my profit by 50% if not more! And for what? They increase and increase our fees but do not give us anything in return. They could AT LEAST give us back the eBay bucks program!

Did I say I am really **bleep**? I am really considering selling elsewhere if there is not point selling here. 😞

[cyber-collector]

DON'T TRUST YOU AT ALL AT eBay....BUT PREFER TO TRUST PIERRE LEBEL,,,AND I'M NOT READY TO PAY AN ADDITIONAL FEE FOR TAXES...EVEN IF IT IS ONLY 2-3-4-5% OR SO...WE HAD ENOUGHT RAISE IN FEES IN THE PAST YEARS AND ESPECIALY WHEN YOU eBay, DECIDE TO CHARGE 10% FEES ON SHIPPING...WHY ??? ITS AWEFULL AND DISGUSTING...WE ALREADY PAY A LOT TO CANADA POST FOR SHIPPING AND TAXES ALREADY...SO WHAT...ARE YOU SO DESPERATE TO MAKE MORE MONEY ON OUR BACK...AND VERY SOON, WE WILL HAVE TO PAY YOU TO WORK...THATS ABOUT WHAT A BUNCH OF SELLERS ARE DOING NOW...

SORRY FOR THE CAPITAL LETTERS, MY KEYBOARD IS NOT WORKING PROPERLY AND WILL GET ANOTHER ONE THIS WEEKKK...SORRY AGAIN....BEE DEE BEE DEE THAT ALL FOLKS....

[cyber-collector]

YOU ARE ABSOLTELY RIGHT !!! MY FRIEND, I AGREE WITH YOU...!!!

[thestuffofchris]

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@lady.stark wrote:

They could AT LEAST give us back the eBay bucks program!

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They are. It was announced in the Summer Seller Update alongside everything else.

http://pages.ebay.ca/seller-centre/news/seller-updates/2017summer/features-investments.html

[cyber-collector]

Hey dutchman, don't you know that eBay is driven by a bunch of Kiddos with nice pay check and NO experience in Business at all and Those who said they are there for 15 or more years pretending to make eBay a better place are still there for their FAT PAYCHECK, And they always change Something Good for us for Something a Lot Worse and thats going on for a long time...Mr.Omidar pay those guys to be sure he make more and more Sucking our time and money and products working like fools to make few Buck with our items we want to sell trying to make our life a Bit better...I'm 67 and on eBay since 1995 witth SLOW PCs and not the only one...Why not Giving a Break to the Vétérans who make you rich SIR...THANK YOU... $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

[eurobeads]

I'm confused as to why some of you are discussing this nonchalantly as if this is just a minor accounting adjustment, tax credit, "only on eBay fees" etc etc. The bottom line is: EBAY IS ONCE AGAIN CHARGING US MORE $. In the last little while, we lost our TRS discounts, final value fees went up, and now we're getting taxed on our bill. I'm just gonna change my registered address to an American one. How about that? Hun? I don't live in Canada anymore. I'm so sick & tired of this - EVERY SINGLE UPDATE comes with news of getting charged more $.

And plus, how do I REALLY know if this 5% is actually going to the government???? It's probably all a scam, I mean how do we really know they're actually going to fork over every cent of this money to the government? Do we get to see their tax paperwork? BS. They're gonna cheat and we're lucky if 1/4th of this "tax" actually goes to the government. Make no mistake, you've just been robbed AGAIN. And who gives a flying beep about the eBay bucks? That's just like the stupid shipping supplies coupon distraction. Keeping their money rotating in their own company. Give me something that doesn't benefit your greedy behind for once. Give me an amazon card, a Starbucks card, SOMETHING, ANYTHING that won't end up back in your pockets again.

[hlmacdon]

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@eurobeads wrote:
I'm confused as to why some of you are discussing this nonchalantly as if this is just a minor accounting adjustment, tax credit, "only on eBay fees" etc etc. The bottom line is: EBAY IS ONCE AGAIN CHARGING US MORE $.

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For those of us who declare our ebay income and are GST/HST registered that is all it is, a minor accounting adjustment. It just becomes another ITC to claim , just like the GST paid on shipping, supplies, etc. The net impact is zero. If you are not currently registered then you'll have to evaluate if it makes sense to register or not with the implications of having to collect and remit taxes considered. If your sales exceed $30,000 within 4 consecutive calendar quarters (or a single quarter) you have to register regardless. If you register you can then recover additional GST amounts paid on other eligible ITCs. It helps if you look at it with the mindset that you are already paying GST on goods and services that relate to your ebay business. This is just another in addition to those.

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And plus, how do I REALLY know if this 5% is actually going to the government???? It's probably all a scam, I mean how do we really know they're actually going to fork over every cent of this money to the government? Do we get to see their tax paperwork? BS. They're gonna cheat and we're lucky if 1/4th of this "tax" actually goes to the government. Make no mistake, you've just been robbed AGAIN. And who gives a flying beep about the eBay bucks? That's just like the stupid shipping supplies coupon distraction. Keeping their money rotating in their own company. Give me something that doesn't benefit your greedy behind for once. Give me an amazon card, a Starbucks card, SOMETHING, ANYTHING that won't end up back in your pockets again.

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Considering the change was likely made after discussion with the CRA and other government bodies, they will be well aware of the change.  If ebay plans on being nefarious they have likely goofed by making this announcement as public and transparent as they have. The treatment of GST is quite strict as I can attest having been selected for a GST audit previously and there won't be any magical accounting going on. They'll remit and be audited from time to time like individual businesses. The realities of online marketplaces are changing, and jurisdictions are going to be chasing down every tax dollar that should be paid, and there will be a chorus of large retailers lobbying all the way along.