eBay

velvet@ebay · ‎05-03-2022

Hi everyone –

We know you might have questions regarding the email you recently received about eBay Canada collecting Canada Sales Tax (GST/HST/QST/ PST) on behalf of our sellers. Please feel free to leave your questions and comments here and we’ll get them answered as soon as possible. Keep in mind there could be a delay as we check with internal teams to ensure we’re getting you the right answers to your questions.

Thanks for your patience!

Anonymous · ‎05-05-2022

This is going to destroy Ebay sellers who are not a business and its unfair to buyers. Charging tax on used items people are trying to sell isnt fair to the seller and the buyer. People can purchase used products elsewhere and pay no tax, so why use Ebay.ca, I definitely wont purcase anything on Ebay.ca. Its going to end up hurting Ebay profits as well. The Liberal Canadian government will probably end up tracking your sales, and having you claim it on your income tax.

teenytrinkets · ‎05-05-2022

@ricarmic

Very enlightening discussion about ITCs... it could actually be very beneficial for all small time sellers to make sure they include their online sales on their returns! More work for the CRA and more money in refunds to dole out! Sure they're going to be getting more money, and small time sellers will lose sales, but I do agree that the CRA will most certainly have a conniption. And with all the post-covid payment nightmares they're likely going to be cleaning up for years, it's not like they needed to add to their workload. They'll probably be hiring for those that decide to close their ebay stores! Lol

mrdutch1001 · ‎05-05-2022

"This is going to destroy Ebay sellers who are not a business and its unfair to buyers."

This is not unique to eBay...other online selling sites will be required to charge these taxes as well...

Amazon is already there, others will be required in the not so distant future...

so suggesting buyers will go elsewhere, is hardly going to be the big issue...

buyers are going to find themselves paying these taxes on more sites than eBay and Amazon!

teenytrinkets · ‎05-05-2022

@Anonymous

The govt has already tracked sales years ago when ebay was required to report sellers that had more than $20k in sales annually. Not particularly cost effective for them to bother with the small time sellers that are decluttering. But that will change when SINs are required - that's how they'll ensure everyone is reporting. They require SSN in the US and they now get a tax form every year, so you can expect that it's coming. That's probably going to be a rule for every online marketplace. I wonder if the govt will employ people to start trolling garage sales!

lotzofuniquegoodies · ‎05-05-2022

@teenytrinkets wrote:
@Anonymous

The govt has already tracked sales years ago when ebay was required to report sellers that had more than $20k in sales annually. Not particularly cost effective for them to bother with the small time sellers that are decluttering. But that will change when SINs are required - that's how they'll ensure everyone is reporting. They require SSN in the US and they now get a tax form every year, so you can expect that it's coming. That's probably going to be a rule for every online marketplace. I wonder if the govt will employ people to start trolling garage sales!

Next stage will be all sellers required to take inventory of their trinkets on a monthly basis and report to the concerned agencies. Auditors are being hired at $100.00 per hour as we mull.

-Lotz

lady.stark · ‎05-05-2022

@marnotom! wrote:
I don't know if Canadian tax legislation has caught up to the unique nature of marketplace facilitators when it comes to commerce or if it needs to, but Amazon Canada has already been handling sales made through its marketplace in this manner for nearly a year now, so make of that what you will.

Do you know if Amazon is telling their sellers how much tax was collected for them?

m_alea_utxtii · ‎05-05-2022

Completely rediculous, I am sure you will stack the fees as much as you can too. Taxes should only be charged if you sell your item for a gain. Was just starting to try and become a seller and you guys have put an end to that.

dpetzz · ‎05-06-2022

ok so I get the concept that BUYERS in Canada will now pay pst and gst on their purchases and that sellers will probably see an increase in fees as the taxes that the buyers pay will be in the total final price that fees are based on.

However, my questions is as follows, how can ebay tax a USED item or even a new item that is exempt from PST in a given province. For example, in Manitoba Used clothing or used footwear valued at $100 or less and Used furniture valued at $100 or less when purchased for domestic use are PST exempt. In addition, there a huge lists of products and services which are also PST exempt in Manitoba. An example of new items are Childrens' clothing and items. In Manitoba, Children’s clothing, footwear and accessories within certain size ranges are exempted from PST if the selling price is $150 or less.

it's one thing if Ebay is going to put this into place but they need to make sure their system accurately charges taxes on products and doesn't go against the current tax laws in provinces.

furthermore, EBAY has alot of companies who do the final sales and get their products from suppliers. In Manitoba, the PST (RST its called as a retail sales tax) is not charges for Goods purchased for resale by a person who provides their RST number to their supplier..... Will Ebay be taking these registration numbers from users who have stores on the site? If not, Ebay is conducting itself in a non-lawful manner by going against certain provincial tax laws.

velvet@ebay Can you address theses issues and inform us how Ebay plans to correct impliment this

marnotom! · ‎05-06-2022

@55-yard-line-sportscards wrote:

I'm wondering the same thing, and won't be surprised in any way whatsoever if eBay starts applying the fee structure to this additional amount. They already seem to have difficulty understanding that an item that sells for ten bucks is worth ten bucks whether I'm mailing it to Canada for $3 or the U.S. for $6.

Sorry to be late to the party on this. eBay doesn't charge its Final Value Fees on the item, but on the total transaction value. You might want to have a chat with your accountant, though, because if you're shipping outside of Canada, eBay still uses your lowest domestic shipping rate to calculate the transaction value, so a shipment to the US would be charged Final Value Fees based on the Canadian shipping rate, plus (see below). . .

@55-yard-line-sportscards wrote:

They'll probably apply the fees to the taxes, at which point sellers will have no choice but to pass it on to buyers, then the buyers will get annoyed and leave lower DSRs or negative/neutral feedback as a result. Just wait for it.

Looks like that will be the case, but remember you've already been paying Final Value Fees on your shipments to the US where eBay has had state and local sales tax added to the total cost of the transaction, as well as to some European countries (where you're looking at VAT of 20% and up), Australia, the UK, and probably a few others I've forgotten.

sunflowerlaptops · ‎05-06-2022

Hey coins.4.fun, thanks for your reply 🙂 Really? Huh... I suppose the CRA is already aware that eBay is collecting GST/HST on our (sellers') behalf, so I guess it's not necessary for me to fuss with that part now....that said, that means I will always be getting money back (refund), whereas historically I almost always have to remit GST/HST. Do you see? I cannot complete the ITC formula, without knowing how much GST/HST was collected from my customers. Perhaps eBay will be reporting this number to us in a report, in a downloadable format (.pdf or .csv), as I will need some sort of "virtual paper trail" / proof of my calculations.... Or am I talking in circles LOL.

ricarmic · ‎05-06-2022

@sunflowerlaptops

How we report is going to be interesting. I'm one of those "medium old" folks who's still filling out the paper GST/HST forms, so I went back and looked at what it says on the forms we fill out.

It says specifically "Enter the total of all GST and HST amounts that you collected or that became collectible by you in the reporting period"

After July 1st, eBay will be collecting it. Whenever the "billing agent authorization" forms come out, it appears we somehow acknoledge to the CRA that ebay is collecting it for us.

This as I currently understand it would mean that eBay sold stuff looks the same as internationally sold stuff (zero rated).

For an easy example if someone sold ONLY stuff on ebay then our sales would be $XXXXXX and the GST/HST collected by us would be $0.00

This would also mean that we'd get a 100% refund of our ITCs.

My current (possibly wrong) thinking is that the eBay reporting of GST/HST collected is simply our proof to the CRA if we're ever audited that someone collected the taxes on the sales we made on ebay.

We might know more when we set up the "billing agent authorizations". I couldn't find anything on the CRA website using those terms but I may not have been looking in the right places.

lotzofuniquegoodies · ‎05-06-2022

@ricarmic wrote:
@sunflowerlaptops

How we report is going to be interesting. I'm one of those "medium old" folks who's still filling out the paper GST/HST forms, so I went back and looked at what it says on the forms we fill out.

It says specifically "Enter the total of all GST and HST amounts that you collected or that became collectible by you in the reporting period"

After July 1st, eBay will be collecting it. Whenever the "billing agent authorization" forms come out, it appears we somehow acknoledge to the CRA that ebay is collecting it for us.

This as I currently understand it would mean that eBay sold stuff looks the same as internationally sold stuff (zero rated).

For an easy example if someone sold ONLY stuff on ebay then our sales would be $XXXXXX and the GST/HST collected by us would be $0.00

This would also mean that we'd get a 100% refund of our ITCs.

My current (possibly wrong) thinking is that the eBay reporting of GST/HST collected is simply our proof to the CRA if we're ever audited that someone collected the taxes on the sales we made on ebay.

We might know more when we set up the "billing agent authorizations". I couldn't find anything on the CRA website using those terms but I may not have been looking in the right places.

@ricarmic

Maybe instead of the seller getting any kind of refund, that refund will go directly to eBay. Hey, it's possible!! Seeing as they have done all the work. If there's a penalty or amount owing eBay would be responsible for that also. <All said tongue in cheek>

-Lotz

ricarmic · ‎05-06-2022

It wouldn't really make a difference to them as they're already recovering their ITCs with or without it, doesn't increase their ITCs because they had no (or next to no) extra ITCs from collecting it.....

ricarmic · ‎05-06-2022

velvet@ebay

I have a question, I'm assuming it is ok but I want to confirm first.

Traditionally I have covered the taxes for my Canadian customers. The story of why is long and not necessary here.

After July 1 my customers are going to be charged the taxes that repeat buyers didn't have to pay before.

I would like to send out a store newsletter to the subscription base advising my customers of the upcomming change and advise them if they're Canadian and on the fence about something to buy it before July 1st.

So I'm asking if it is ok to advise buyers of this date and impact in this kind of situation.

THX for your help!

velvet@ebay · ‎05-09-2022

@ricarmic wrote:

velvet@ebay

I have a question, I'm assuming it is ok but I want to confirm first.

Traditionally I have covered the taxes for my Canadian customers. The story of why is long and not necessary here.

After July 1 my customers are going to be charged the taxes that repeat buyers didn't have to pay before.

I would like to send out a store newsletter to the subscription base advising my customers of the upcomming change and advise them if they're Canadian and on the fence about something to buy it before July 1st.

So I'm asking if it is ok to advise buyers of this date and impact in this kind of situation.

THX for your help!

That's a great question @ricarmic! I'll see what I can find out.

velvet@ebay · ‎05-12-2022

@bckg_1033 wrote:
If I understand this correctly, now that Ebay plans to charge and collect gst/pst and in my case pst, there is no need for me to use the tax table once this is implemented in July. No further need for me to collect and or remit as taxable sales from this platform, as eBay will be doing that and forwarding the money to revenue Canada.

Hi @bckg_1033! The tax team said:

For Canadian sellers, you are correct. The seller tax tables will be disabled for intra-Canada transactions on July 1, 2022. eBay will be collecting the GST/HST/PST/QST on all intra-Canada transactions beginning on this date and remitting the tax collected to relevant government or taxation agency.

velvet@ebay · ‎05-12-2022

@sunflowerlaptops wrote:

Hi guys! I've been a registered Canadian business for over 16 years now, and I employ the Input Tax Credit (ITC) form of collecting GST/HST from my online (eBay) customers. In essence, I credit against any of said taxes collected, with purchases and expenses that are made for and by the business. So - if eBay is going to start collecting GST/HST on my behalf as of July 1 2022, how does that work for ITCs? Will I start losing out on hundreds of potential tax credits? It's a bit confusing and rather scary to be honest. Thanks in advance for your response!

Hi @sunflowerlaptops! The tax team said:

Beginning July 1, 2022, eBay will be responsible for the collection of the GST/HST/PST/QST intra-Canada transactions. Sellers who have historically taken an Input Tax Credit (ITC) may be in a refund position and may need to seek refund directly from the CRA/Quebec going forward.

velvet@ebay · ‎05-12-2022

@the-chief-factor wrote:

Hello,

I realize that the buyer is paying for the GST/HST/PST/QST however will this amount get added to the total sale upon which the seller pays eBay a commission fee? I ask because when a US buyer purchases from me (I'm a Canadian seller) eBay adds state taxes to the sale and then forwards the taxes to the appropriate authority, however I'm still required to pay a commission on the tax which is added to and then removed (almost immediately) from the sale.

Hi @the-chief-factor! The tax team said:

Current day, if a Canadian seller is required to collect GST/HST/PST/QST, fees are imposed on the total sale price paid by the buyer, inclusive of shipping and taxes. This is the same for a Canadian seller concluding a transaction in the US, where sales taxes may be due on the transaction. Fees will continue to be imposed on the total sales price. Note that any sales tax/GST/HST/PST/QST collected is immediately placed in a liability account whereby eBay pays the relevant government or taxation agency.

velvet@ebay · ‎05-12-2022

@canadacoinchest wrote:
How is eBay going to differentiate tax exempt goods from each other? Will eBay have an entire list of exempt metals and other used items?

Hi @canadacoinchest! The tax team said:

eBay is implementing and utilizing third-party taxation systems to differentiate tax exempt goods from each other. We will have an entire list of exempt items and rules at the Federal and Provincial level.

Note that most used items are subject to the tax. The requirement for taxation is based on the transaction, not the item. The buyer in each individual transaction separately pays the GST/HST/QST/PST as applicable.

velvet@ebay · ‎05-12-2022

@marnotom! wrote:

@the-chief-factor wrote:

I realize that the buyer is paying for the GST/HST/PST/QST however will this amount get added to the total sale upon which the seller pays eBay a commission fee? I ask because when a US buyer purchases from me (I'm a Canadian seller) eBay adds state taxes to the sale and then forwards the taxes to the appropriate authority, however I'm still required to pay a commission on the tax which is added to and then removed (almost immediately) from the sale.

And to add to your question, if Canadians selling to Canadians on eBay are going to be subject to FVF being charged the sales taxes added to the transaction, will sellers not based in Canada also be subject to paying FVF on Canadian sales taxes?

Hi @marnotom!! The tax team said:

Fees will continue to be imposed on the total sales price. Please note that sellers outside Canada may have their own requirements to collect the tax and they will pay fees on the total sales price.