zW2Ig~~60_7.JPG "brandeentertainment"){kind=avatar}
From a Canadian buyer's perspective, you face seven tax possibilities:
1) Seller is located outside Canada, is not GST/HST registered, and buyer is expected to pay taxes and duty (if applicable) and brokerage fee (if applicable) at time of receiving the item.
2) Seller is located outisde Canada, is GST/HST registered, and taxes will be added to the payment. Very few foreign eBay sellers are GST/HST registered.
3) Seller is Canadian individual not registered with GST/HST and does not collect the tax. That's pretty easy!
4) Seller is Canadian individual not registered with GST/HST, collects the tax and pockets it. It may be illegal but many sellers do it and get away with it.
5) Seller is Canadian individual or business registered with GST/HST and seller absorbs the tax for Canadian buyers (for competitive and marketing reasons). The seller is still responsible to remit the tax.
6) Seller is Canadian individual or business registered with GST/HST and collects tax on taxable transactions with listings clearly stating tax is payable. Rates vary by province of buyer's residence.
7) Seller is Canadian individual or business registered with GST/HST and collects tax on taxable transactions. However, listings make no mention of tax payable (buyers are to assume tax is payable and the seller registered to collect it) or it is only stated on the "Shipping and Payment" page as you have indicated.
Many years ago, to help prevent fraud and misunderstanding, I suggested to eBay's country manager to require that GST/HST registration number be supplied to eBay to allow sellers to collect taxes to avoid possible fraud. I also suggested the tax rate if applicable be highly visible. Both suggestions were rejected by eBay's management.
eBay simply does not see a tax problem in Canada because there is no federal tax in the USA on eBay.com. From a marketing perspective, eBay would like to have all buyers feel they do not need to pay tax when buying on eBay. Trying to convince eBay to make tax payable highly visible is, unfortunately, a non-starter.
And yes, it is a real problem.
When the standard is that purchases are tax free
Whose standard is that? And for sellers who use tax included pricing it's about as "tax free" as "free shipping" is free.
then when someone does charge tax it always feels wrong
I feel it's wrong to be paying taxes and not even know it. Hidden taxes are like hidden subsidies, I don't approve of either one when it comes to government.
In Australia, GST is generally included in the price at the retail level. The same is true all over Europe with the VAT (equivalent to our GST).
However, way back in 1990, our Prime Minister Brian Mulroney made the decision that the newly introduced GST (7% at the time) should be visible and not included in the price unless clearly visible signs indicated tax included at the cash register.
It was a political decision.
Now Canadians have to live with it.
" It is the only small percentage ebay and paypal do not touch."
Sorry but PayPal does charge its fee on the total value of the transaction, including the taxes.
"When the standard is that purchases are tax free..."
"It's the ebay standard that purchases include item cost plus shipping cost,"
There is no such standard on eBay. Once upon a time most sellers on eBay were individuals and, as such, not registered to collect and remit the tax. Things have changed over the years and the vast majority of listings on eBay offered by Canadian sellers today come from businesses registered to collect and remit GST/HST. A few categories may show a higher percentage of individual non-registered sellers, but that does not make it an "eBay standard".
The situation is very different in the USA where there is no federal consumption tax and the vast majority of transactions - even for cross border - does not attract any tax.
" As for a seller including the tax in the item price I do not like the idea."
"Same goes for Taxes and Legit business is charging you taxes..."
"I prefer charging taxes.... About 12hrs less work a month."
Please allow me to present a different perspective, based on my personal online selling experience of the last fourteen years.
Back in 1998, when I started selling online using the auction format (what a novel concept at the time!) on eBay, Amazon and Yahoo! I quickly realized that the majority of my customers (over 90%) were either Americans or from overseas (mostly Europe at the time). Canadian buyers accounted for less than 10% of my online sales.
It is also a fact of life that the vast majority of stamps purchased by Canadian buyers from the USA and overseas were sent by letterpost and entered Canada without tax being added by Canada Customs.
To maintain a competitive edge on my Canadian competitors (other stamp dealers like "fatdane") I decided to absorb the GST payable on Canadian sales as a cost of doing business, like advertising, packaging materials, etc....
The cost was relatively small. For every $100,000 sold, $10,000 was shipped within Canada costing me $654 (GST was 7% at the time) or 6.5/10 of one percent overall. No big deal. It kept my customers happy and I did not need to increase my prices to hide the tax from Canadian buyers.
Yes, it worked for me.
Obviously, I would have reached a different conclusion if the majority of my sales went to Canadian buyers as indicated here by many other sellers.
As far as saving time (12 hours a month) by charging tax, I just do not get it. How can charging tax save time?
