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]

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@Anonymous wrote:

I don't understand the purpose.  I am not registered for GST/HST or whatever, so where will $$ go to?  to eBay's huge pockets??

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To the government. The purpose is the same as any other good or service that is taxed in the country.

[pierrelebel]

" so where will $$ go to?  to eBay's huge pockets??"

As stated several times in other posts, the tax is collected by eBay on behalf of the government and remitted to the government.

Why are you not registered with GST/HST?

[netplicity15]

It's pure B.S.!! Wake up people!!

[netplicity15]

EBay Fees, Canada Post Fees, PayPal Fees, now EBay HST on their sellers fees...its completely destroying an already slim profit margin.

[pierrelebel]

" now EBay HST on their sellers fees...its completely destroying an already slim profit margin. "

Not much can be done to lower your eBay fees other than to open a store and pay monthly fees if your sales volume justifies it (eBay store owners generally pay lower Final Value Fees, depending on categories)

The tax on eBay fees and postage can be totally eliminated if you register for GST/HST (Registered sellers get Input Tax Credits equal to 100% of the GST and HST paid).  Many sellers do even if their annual volume is below Cdn$ 30,000.

On the other hand, if a seller only sells $1,000 a year with eBay fees of $100, there is no point to register to save only a few tax dollars (depending on seller's location).

[of-the-world]

Pierrelebel Thanks for your input on this matter.

Aside from my emotional feelings about more taxes and more nickle diming from small sellers

you cleared up alot of my questions in this thread.

It should not be applied at all to people selling used goods.  But it will be . Used goods are tax exempt in most

commercial environments (goodwill for example) Most people do dabble in selling used

goods.

People using ebay as middle ground for their real brick and mortar store or have an online presence

of distrubution of brand new items from warehouse then that is where Taxes of course should be applicable.

I was happy to see the taxes ONLY reflect the final ebay fee we have to pay per month. I had the impression

they were going by every single item value.  That I can live with if that is the case.

[of-the-world]

While I'm on your page with your sentiment.. I look at this way now.

I could have a brick and mortar store. But selling my goods on ebay negates a huge hole

that would suck all my profits just to keep a store up. And my items as well are

not of interest to people in my area. Worldwide is a different story.

So Ebay as a service that changed over time - (they hooked us in of course) they now dictate

and we follow or leave. It's  a choice.

We allowed for no competition to exist we allowed paypal to become ebay vice versa - alot of bigger problems

which everyone just avoided in 15 years.  Heck  in 2000 here in Canada I used to be able to take my money out

instantly with paypal right from a Bank machine.  How did we start so forward thinking to the place we are at today.

Because share holders are dictating the direction..they are not the sellers.

Tax has a purpose. But redundant taxes and fees are a crime.  Users need to find a way to protest and make the changes

but it takes a lot of hard work and probably lawyer money.

So now do I stay or should I go? that is the question.     On top of being hit with my first chargeback ever by an evil scam artist... a lot of red flags happening around here. Paypal and Ebay retract any help with you are hit with a chargeback!!!

[of-the-world]

"not much can be done to lower the fees" -

well that's true to a degree but I kept a spotless record as a seller and as of this year they took away the 30% discount and dropped it down to 20% for what I understand is everyone?

What kind of nonsense was that?  They want to make us leave.  Like over and over, I get that impression they are trying their damndest to mess with Sellers.

[luch6006]

Looks like this is the final straw for sellers like myself who don't charge taxes and do not operate as a true "business". I get it if you already charge taxes on your sales and are registered with the CRA as a business. To have to pay taxes to Ebay for sales that are not taxed to begin with is crazy. So basically sellers are going to pay taxes on final value fees that already have 10% of the shipping cost applied to them (which is total b.s.) in addition to the actual sale.  The Powerseller discount drops from 20% to 10% and don't forget the Paypal fees.

Good thing all my auctions end before the end of the month cuz that will be pretty much it for me. It was great while it lasted but this is the final straw. I had a ton of great customers Domestically and Internationally over the years but I'm not going to keep increasing the sale price and shipping to keep up with Ebay's own personal gain. Take off the 10% value fee on the shipping and maybe some sellers might stick around. Maybe.....

[dackel-stadt]

eBay must remove the total fees including shipping as we pay taxes on the shipping in top of the price in Canada and not included in the price asked so this means we need to pay the shipping taxes TWICE?! no way this can be legal!!!

[dackel-stadt]

34% taxes on shipping if eBay charge taxes on the fees which includes the shipping amount too. EBAY you need to change that for Canadians only have taxes on the fees of the item sold and not combined with the shipping!!

[dackel-stadt]

Ok I called eBay was transferred to upper management and they infact Disnt know that we are charged taxes in shipping here again the USA They don't have taxes added to the price of shipping. .

I was told they will review this closely and make appropriate changes.

Please all should call inand make them aware of this as more people complaint they will have to change that.

[dutchman48]

Pierre:

Aside from the numbers above, should Ebay be allowed to charge tax on the FVF on shipping as shipping is not a service they provide.

They charge a % FVF on it which is questionable but can they legally charge tax on that.

[pierrelebel]

"but can they legally charge tax on that."

The answer is YES.

eBay does not charge the tax.  The Canadian federal government does.

If sellers are GST/HST registered, they get the tax back, 100% of it.

You need to look at it nor from eBay's perspective (nobody really cares) but from the government's perspective, based on the rules they have put in place.

If a taxable item is sold to a HST province (ON for example) the registered seller must, by law, remit 13% HST on the amount of the transaction (including shipping and handling).  eBay does not make those tax rules, the government does.

Whether the seller sells for $100 and $20 shipping or $120 with free shipping, the government wants the same amount of tax.  eBay also wants the calculation for its fee based on the transaction amount (like most large competitors).  Then the government wants to tax the fees.

Nobody likes to pay taxes but.... that is the way it goes.

[tobey_arih]

Its **bleep**... FVF on item is ridiculous. A whopping 10%, massive increase since the change.  Then there's pecking on FVF shipping/handling.  OH yeaH, AS iF i PAY FOR THE PACKAGING IF NEEDED and get dinged also for FVF on it.  So it its not the case for me. Actual shipping includes GST also , at leeast with UPS.  So we, canucks are getting ding twice for GST with this.

As if CRA would negotiate this crazy deal with Ebay.  This corp is as it is a M$ (Microsoft).  I want to see tht actual workup of this supposed contract with CRA, phsycially..

Peeved, again

[tobey_arih]

Taxing on total FVF is unfair when what casual seller just selling his/her used stuff online.  it has negative doubling effect for sellers who do want try to make it work. but its becoming an encumbrance.  Why CRA + ebay doing it now when they decades to implement it.  

I do not see the feasiblity as it will tee offf the much of all canadian sellers.  I swear I tempted to circumvent this..

I bet no one in high GST/HSt provinces would dare auction their used/new stuff now.

[dutchman48]

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@pierrelebel wrote:

"but can they legally charge tax on that."

The answer is YES.

eBay does not charge the tax.  The Canadian federal government does.

If sellers are GST/HST registered, they get the tax back, 100% of it.

You need to look at it nor from eBay's perspective (nobody really cares) but from the government's perspective, based on the rules they have put in place.

If a taxable item is sold to a HST province (ON for example) the registered seller must, by law, remit 13% HST on the amount of the transaction (including shipping and handling).  eBay does not make those tax rules, the government does.

Whether the seller sells for $100 and $20 shipping or $120 with free shipping, the government wants the same amount of tax.  eBay also wants the calculation for its fee based on the transaction amount (like most large competitors).  Then the government wants to tax the fees.

Nobody likes to pay taxes but.... that is the way it goes.

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So, if I sell something for 100 + 15 for shipping to Ontario, Ebay (on behalf of the gov't) will charge FVF on the 115 and then HST on the FVF.?

If I then go to the Post Office to ship my parcel, they will again charge me HST because it is going to Ontario?

So in reality I am paying tax on the shipping at the PO and also paying tax on that FVF on that same shipping charge. Is this not really double dipping?

If I am at 10% with no store, I pay Ebay 1.50 FVF on the shipping and then 13% or 19.5¢ tax on it and then the post office charges me another 13% on the shipping cost of 15 for $1.95.

So in reality I am really paying $2.145 tax on that shipping which is really 14.3%.

To me that is double dipping. I would have to increase shipping to the buyer a considerable amount more as a result of the taxation so I don't lose money on shipping?

I can see prices going up drastically as a result, and then even more if you figure out the tax on the sale price FVF's and store if you have one.

Does this about sum it up or am I missing something?

[dinomitesales]

I just read this thread and... wow. There sure are a ton of people here that seemingly have no idea how taxes in Canada work.

Pierre is giving good advice. It makes sense. If you're really going insane over this additional tax on eBay fees then simply apply to remit GST and you'll get the money back. If you're a small-time hobby seller that has no plans to register for GST then oh well, suck it up. In the grand scheme of things it is a very small increase in your expenses.

[chipmunk_collectibles]

I wonder if this applies to listings on Ebay.COM? Since ebay.com is a foreign website owned by a foreign corporation using USD, there's technically no service being provided in Canada.

[ypdc_dennis]

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@chipmunk_collectibles wrote:

I wonder if this applies to listings on Ebay.COM? Since ebay.com is a foreign website owned by a foreign corporation using USD, there's technically no service being provided in Canada.

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It applies to fees charged by eBay,CA on their monthly invoice regardless of where you listed the item.

Currency a sale uses does NOT matter. Ownership of the company does NOT matter.  eBay is in Canada (they've just been dodging collecting GST/HST on their fees up until now).

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