eBay to Provide Revenue Canada with Your Information for 2006-2008

[pierrelebel]

We all know about the previous request for 2004-2005.

Now, we are looking at 2006, 2007 and 2008:

---

In September 2009, eBay Canada received a court-authorized requirement from the Canada Revenue Agency that requires it to release the account information and sales data of Canadian resident eBay members who meet the following criteria:
• Sales of more than $20,000 and at least 24 sales transactions in any of the calendar years 2006, 2007 or 2008, (irrespective of membership in eBay's PowerSeller program); OR
• Sales of more than $100,000 in any of the calendar years 2006, 2007 or 2008, regardless of the number of sales transactions.
eBay is only required to release sales information for the year(s) in which a seller met the above sales thresholds.

Our records indicate that your annual sales in the calendar year 2006, 2007 and/or 2008 meet the requirement for disclosure to the Canada Revenue Agency.

Member information that will be released for 2006, 2007 and/or 2008 includes: full name, user id, mailing address, billing address, telephone number, fax number, email address, and the selling prices (high bids) of the items.

We recognize that this matter is of concern to our members and eBay Canada takes your privacy very seriously. Despite eBay's strenuous objections, the Canadian courts have ruled in favour of the Canada Revenue Agency and have ordered eBay to release this information. The court orders, additional information and the answers to some commonly-asked questions are posted at www.ebay.ca/CRAinfo. If you have additional questions about this situation, you may email CRA_info@ebay.ca.

We remind all eBay members that they are responsible for ensuring that they are in compliance with all laws and regulations relating to their activities online.

[moltencore]

I'm completely honest about my business's yearly income so why would I need to be concerned?

If you work for a company your T4 or T4A which goes to Revenue Canada has all that info (less of course the phone #/email address part).

[axe_n_gear_music]

Yes I just received that exact email from eBay as well.
Not worried though, all my ducks are in a row and I collect and remit taxes, etc, and keep excellent records from my eBay and website sales as any proper business should.

Cheers,
AXE

[dipmicro]

These records have only informational value since it's quite simple to open eBay account with any name/address. I have done it as an experiment few years ago.

Perhaps someone is selling under my legal name and I don't even know it and now Revenue Canada will come asking for $100k owing.

Otherwise, they have all my sales numbers already just like most of you.

[bare_bright]

> These records have only informational value since it's quite simple to open eBay account with any name/address. I have done it as an experiment few years ago.
>
> Perhaps someone is selling under my legal name and I don't even know it and now Revenue Canada will come asking for $100k owing.
>
> Otherwise, they have all my sales numbers already just like most of you.

I got the same email Today & I don't think telling revenue Canada that someone else used my name, also I really dont know what to do since most of the items I have sold were not bought and if they were it was a cash sale, alot of items I sold for some friends etc. with my Luck I will get stuck with a big Tax bill, I really don't think it's fair unless your running a business, it's like a garage sale etc. does one one claim that, I guess the government would want so, We are not such a free country as we think we are.

[pierrelebel]

"with my Luck I will get stuck with a big Tax bill"

I most strongly suggest you immediately contact a competent accountant to help you file properly BEFORE the taxman contacts you.

That is the only way to avoid fines and minimize interest costs.

It is your duty to report your sales, costs and expenses and add your net profit to your taxable income every year. If you let the taxman do it for you, you may not like their conclusion and tax assessment and will have to go to court to prove them wrong.

Good Luck.

[pierrelebel]

"We are not such a free country '

FREE ?

Of course not. Who pays for the schools, hospitals, roads, social programs, police/fire protection, etc...

Taxes do. There is no free lunch in a free society.

[dipmicro]

Btw. fines, are not that big on small owing amounts.

Btw. Revenue Canada has no case. I want to see a single case being proven in court. There is no tax on personal sale or sale of the used item, even high ticket items. How many of you have paid sales tax when buying your home?

If you end up having to pay sales tax, you should also deduct your expenses from the T4, because if Revenue Canada wants to treat this as commercial activity, it should be treated like that on both ends. I would not be surprised if after all the balancing Revenue Canada would end up owing you money.

As a taxpayer, I see this activity of Revenue Canada as inefficient spending of my tax dollars. I would like to know how much will/have they spend for this and how much they recover and I am not expecting to be impressed.

[pierrelebel]

" I would not be surprised if after all the balancing Revenue Canada would end up owing you money.

Be serious.

Sellers selling more than $100,000 a year do so to make money. To suggest they all lose money after expenses does not make sense.

Nobody is talking about reporting sales and profit of used personal property. That's not what PowerSellers generally do, is it?

"inefficient spending of my tax dollars..."

CRA does not think so. They have discovered enough non-compliance to continue their investigation and audits of online sellers.

[dipmicro]

I missed the Sales of more than $100,000. In that case should be ok.

Many businesses going out of business - there is no lack of people whose expenses are greater than their income. Did you hear about Herbalife? Never heard about anyone making profit out of it - only losses.

[timwestbackgrounds123]

> I missed the Sales of more than $100,000. In that case should be ok.
>
> Many businesses going out of business - there is no lack of people whose expenses are greater than their income. Did you hear about Herbalife? Never heard about anyone making profit out of it - only losses.

From the eBay email...

"Sales of more than $20,000 and at least 24 sales transactions in any of the calendar years 2006, 2007 or 2008, (irrespective of membership in eBay's PowerSeller program);

OR

Sales of more than $100,000 in any of the calendar years 2006, 2007 or 2008, regardless of the number of sales transactions."

This demand from the CRA shouldn't be a surprise to anyone here, considering their success in the Canadian courts over their original request for information from 2005.

[craftycatsattic]

I haven't received this letter yet. Maybe I didn't make the cut! 😛 It's likely as eBay probaby counts our sales excluding shipping.

I went through this whole thing with Revenue Canada just this summer that I have to count what I collect for shipping as sales and that it does count towards the $30K mandatory limit to collect GST. I'm still not sure they are right about that but anyhow I am not sweating that. I am not even passing on the GST I'll pay for my Canadian sales because it's too much hassle to invoice it or add it on .com and I know in the end the check is going to be written in my name and not Revenue Canada's since I can claim back all the GST I pay.

Anyhow, I remember years ago when people asked me why I was declaring my eBay revenue and the reason for me at the time was simple....peace of mind.

My Dad forwarded a newspaper article to me this summer that I did not see anyone post here saying that the CRC was going to start cracking down on eBay sellers towards the end of the summer. They highly encouraged anyone not declaring their revenue to come forward and do so before fines and possible jail time be levied.

Anyone who has been selling on here and making a revenue is supposed to declare their earnings and should declare their earnings. It's probably because of those people that we are all being put under the microscope right now...so shame on them! If you're amongst those people and bouncing around back and forth thinking Revenue Canada is not going to knock on your door for x number of reasons...whatever makes you sleep at night. You would better spend your time collecting your sales data, expenses etc. and coming clean. When the time comes and they do knock on your door, they are going to want to see your paperwork.

[pierrelebel]

"what I collect for shipping as sales and that it does count towards the $30K mandatory limit "

That is correct.

Shipping and handling charges are part of overall sales. Basically, you sell the "shipping" to your customer. Some sellers mark up their shipping costs, some do not and some offer "free shipping" which means the shipping cost is included in the sales price.

[timwestbackgrounds123]

> "what I collect for shipping as sales and that it does count towards the $30K mandatory limit "
>
> That is correct.
>
> Shipping and handling charges are part of overall sales. Basically, you sell the "shipping" to your customer. Some sellers mark up their shipping costs, some do not and some offer "free shipping" which means the shipping cost is included in the sales price.

To add to this...

Since shipping charges do indeed add to sales revenue, it stands to reason that shipping costs add to the expense side of the ledger.

While we are here, don't forget to claim the GST you've paid on domestic shipping, as this works to help offset the GST you've had to collect on sales.

[craftycatsattic]

> "what I collect for shipping as sales and that it does count towards the $30K mandatory limit "
>
> That is correct.
>
> Shipping and handling charges are part of overall sales. Basically, you sell the "shipping" to your customer. Some sellers mark up their shipping costs, some do not and some offer "free shipping" which means the shipping cost is included in the sales price.

Ok thanks Pierre for confirming that. When I called both Revenue Canada and The Ministere du Revenue, they were not exactly sure and had to put me on hold. Anyhow I better hop to it and get registered. I was told I could pay yearly which means my first report is due in February 2010. Looks like I am going to have to do my tax return (or at least the sales/expense portion of it early this year. I'm really not worried about the balance sheet. I think I calculated that I would have owed less than $200 GST before deducted amounts for my Canadian sales last year and there is no PST on what I sell. I'm sure by the time I tally all the GST and PST I pay on my expenses, supplies, postage, Canadian inventory acquisitions etc. that I'll get money back. I have taken your advice though and am not passing on the charges to my Canadian customers...just too much of a hassle to do on the .com site and on eBay, time is money!

Off topic there have been a lot of posts about .com vs .ca in the past few years with myself asking about it a long time ago when I was trying to decide where to go. Well I ran an AdCommerce campaign in spring (got to get back to it) and just by the number of impressions (for those that don't know, this is how many times your item shows up when someone runs a relevant search). I could tell that Canadians overwhelmingly shop on .com (lol either that or they don't shop eBay at all!). I had next to zero impressions on .ca which means no one is searching for items in my category on .ca. On .com however, I had lots of activity.

[pierrelebel]

"I could tell that Canadians overwhelmingly shop on .com "

That is correct.

I have been running identical campaigns on .com and .ca and the "impressions" and "clicks" on .com outpace .ca at least 20 to 1.