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!

velvet@ebay · ‎05-12-2022

@bigpsycho00 wrote:

I am a standard person that doesn't own store but have a couple of sales per year which definetly are not that much

I am already charged taxes on the final sale - example below in red...

Total fees for item

Final Value Fee

-C $16.13

Variable percentage • Video Games & Consoles category

Rate for C $0.00 - C $7,500.00

C $125.00

×

12.9% =

-C $16.13

Final Value Fee

-C $0.30

Per order fixed amount

Total fees

-C $16.43

GST/HST(5.0%)/QST(9.975%)

-C $2.45

Total fees (includes GST/HST/QST)

-C $18.88

Am i now going to also be taxed on the used items i am selling on top of the taxes on the final sales value fee ?

Thank you

Hi @bigpsycho00! The tax team said:

Fees will continue to be imposed on the total sales price. Taxes on fees will continue to be charged based on seller location as applicable.

velvet@ebay · ‎05-12-2022

@canada_goose_whisperer wrote:

@canada_goose_whisperer wrote:

Ok, so here's what I'm struggling with. "Value-added tax" (or Goods and services tax/GST/HST as we know it in Canada) at essence, is supposed to be applied when some kind of value has been added to a product. When we are selling a pair of used shoes on eBay, we have already paid the sales tax when we originally bought them new. That tax represents the "value-added" by the manufacturer, taking the raw materials and turning them into a pair of new shoes. When we use those brand new shoes, and eventually sell them in a "used" condition, we have not added any kind of value to those shoes, in fact the value of those shoes has decreased, so what is there to be taxed. If the answer is "well its because you sold them on the internet", then what is the point of us paying hst on our ebay fees? The "value-added" in the transaction is the ability to sell on the internet, which is why we are taxed on our ebay fees. Do I like it? No, but it is what it is. Used goods however have not had any value added to them that would require being taxed. Now, if we sold a rare item that had increased in value compared to its original purchase price, then that would be income tax we should be paying on it's value increase, not hst, as we have not added any value to it compared to when it was first purchased and hst paid. The value increase is strictly speculation, numbers, etc, not anything the seller has done to it. If we are charging hst on products sold in pre-owned condition because their value has raised due to rarity/speculation/etc then why are we not being charged hst on the purchase of a share in a company's stock? We get charged a convenience fee and sometimes tax on top of that (like ebay), but if I buy $100 worth of stock in Apple, I'm not getting charged 13% hst on that purchase. If the seller has added value to the goods (modifications, changes, repair, etc...), then more often than not they are already a business anyways. "Cleaning your pair of old shoes" is not adding value to them, as the original value is from when they were first purchased.

Sorry but not sorry for the rant. If you are a business or making over $30,000 then okay yeah you'll have to charge and remit hst because you are buying and selling, but Gladys from across the street should not have to pay 13% hst when she buys my old golf clubs, because I already paid that tax when I bought them new, and I have not modified or added any value to them.

Interesting read if you have the time: https://worthwhile.typepad.com/worthwhile_canadian_initi/2011/05/why-is-there-hst-on-used-cars.html

Maybe I'm misguided, but I feel quite strongly about this so please forgive my massive paragraph of words. I am open to criticism/corrections if you have any please share, discord amongst us is how we can understand this better.

Thanks.

Furthermore, the government doesn't require hst collecting and remittance on $30,000 or less per year. Even assuming this is because it's too costly and not worth it for the government to process hst amounts that low, then okay fine ebay offers an easy way for the government to collect on those small amounts, so they're going to use it.

But that still doesn't mean they should be collecting hst on USED goods sold online, as (like I said above) no value has been added to them, if anything it has decreased in value. The hst was already paid when the item was purchased new. The only way this actually makes sense is if ebay gives an option for the seller to click a box stating that the item has been "modified or changed in a way that adds value compared to what it was in new condition". If hst is being collected on everything regardless then that's flat out wrong.

Further furthermore, even NEW goods, if they've already been bought from the store (for example, you bought a movie that you never got around to opening and watching) that still should not be subject to hst because you paid it WHEN YOU ORIGINALLY BOUGHT THE ITEM. Selling a "new condition" good does no mean it should require hst collection, if no value or change has been added to it. The hst should be just on the ebay fees we pay that allow us to use the platform to sell old stuff from our house, as that is where the value is being added - ACCESSIBILITY. NOT ON THE ACTUAL PRODUCT.

Thank you for coming to my TED talk.

Hi @canada_goose_whisperer! The tax team said:

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

@beavosorus wrote:

Same as was mentioned before, since we don't actually get the tax, how does this effect our Sales Tax Paperwork?

If I collect $1000 in taxes I can use that to offset what I paid in taxes on the raw goods I purchased.

If Ebay collects the $1000 in taxes, what does that do to offset the taxes I paid for the product? Is the govt going to match the difference? If so who reports first?

I have only been collecting sales tax for 2 years and now that I have finally (sort of) figured out what is going on, this is going to create some serious changes on my end.

Hi @beavosorus! 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

@lga4-24 wrote:

If I am a registered GST/HST seller in Ontario, Canada. I ship all my products from Ontario, Canada warehouse. For example on Ontairo purchases I charge buyers 13% HST tax but, Quebec buyers I charge GST only of 5%, and BC I charge 5% GST, and so on. I don't have PST and QST accounts.

My questions:
1. Since July 1, 2022 will ebay start adding 9.975% QST tax on orders to Quebec on top of 5% GST I charge customers? (I don't have QST account, I charge GST/HST only).

If the anaswer is 'YES', so I would have to submit the GST/HST taxes to CRA while Ebay submits the QST portion?

2. What about provinces that have PST of 7% like BC and Manitoba, and Saskatchewan. I charge 5% GST tax on BC, Manitoba and Sask orders. Will ebay start charging PST on my behalf and report direct to CRA?
I don't have PST account.

I am sure the reponse will be helpful to sellers from Ontairo that only have GST/HST account with CRA, but ship across Canada.

Hi @lga4-24! The tax team said:

Beginning July 1, 2022, eBay will be responsible for the collection of the GST/HST/PST/QST on intra-Canada transactions. All taxes collected from buyers on these transactions will be collected by eBay and remitted by eBay. For the scenario above, for a Canadian seller’s orders shipped to Quebec, eBay will collect the 14.975% (9.975% QST & 5% GST) and remit the relevant tax to CRA and Quebec. All of the tax collected will be remitted by eBay. For registered sellers, eBay will obtain a billing agent authorization form. This document must also be retained by registered sellers.

eBay sellers will continue to pull down their seller reporting monthly for their transaction data. The CRA and Provincial authorities are aware of this change and the shift in compliance.

Note that the tax will now be collected and remitted directly by eBay on behalf of all Canadian sellers – registered or not. This change should streamline paperwork and processes, not complicate them.

The cost of sale to registered sellers does not increase – the tax on the items is paid by the buyers. The collection, compliance, and remittance will now handled by eBay.

velvet@ebay · ‎05-12-2022

@pjcdn2005 wrote:

velvet@ebay

I'm reposting this question from a poster on another thread

The question is from @jimmymoto!

In the current (old) system, sellers apparently have no way to accomodate resellers like myself who have a PST exemption, therefore I have to pay PST unnecessarily on many items I purchase on eBay that I sell in my retail store.

BACKGROUND: Businesses registered to collect PST are exempt from paying PST on items made available for resale, as PST is supposed to only be collected once by the final retailer and not at every step in the supply chain.

Does this new change enable eBay to provide PST exemptions, and if so where do I submit my PST registration documentation?

Hi @pjcdn2005! The tax team said:

An accommodation for resellers with PST exemption will not be available on July 1st – resellers will need to continue to seek refund from the Provinces directly on these transactions. We will be looking into adding this exemption at some point in the near future. However, for the time being, the reseller exemption will not show on a buyer account.

velvet@ebay · ‎05-12-2022

@jwstewart.shaw wrote:

I have a question. Does this apply to all eBay accounts, or only Business accounts?

Because when I called the CRA GST/HST Rulings center today at (800) 959-8287 I was told that it is NOT neccessary to collect GST for the sale of used personal property, by an individual. (He used selling it on eBay or Kijiji as a specfici example) The agent said if I were in the business of seling used goods and had revenue exceeding $30,000 in the last 4 quarters, I would need to collect and remit GST.

So does eBay take into account this long standing and still effective fact that individuals selling thier personal property are not required to collect GST?

Hi @jwstewart.shaw! The tax team said:

This change applies to all eBay accounts. The new rules for digital platform operators such as eBay impose a tax on non-exempt used goods. This new tax applies to both individuals and businesses.

velvet@ebay · ‎05-12-2022

@cobaltbluedragon wrote:

For those who are already required to pay GST and PST, this new policy sounds excellent, and will probably save them much time, effort, and stress. Good for eBay, good for the sellers, good for the customers.

However, the new policy is definitely inequitable to small resellers who are not required to pay GST or PST, in several ways.

First - as a small seller, not having to charge GST or PST is one of the few advantages that help offset the higher overhead costs of being a small volume seller and keep our pricing competitive. We will now need to lower prices by 13% to keep the same small advantage. How many small sellers have this margin to play with?

Second, who will receive these funds that we are not legally required to pay? The Federal and Provincial governments, or eBay? Respectfully, I don't like either idea - my governments receiving money they are not entitled to, or eBay keeping the funds for itself.

Third, this policy means GST and PST will be collected on my sales but I will be unable to receive credit for GST and PST that I pay on items to resell. Again, not very fair.

And fourth, eBay customers who buy my products under the new policy would in fact be paying taxes they are not legally required to pay by the Federal or Provincial governments. This doesn't seem right to me as a seller, or as a buyer.

Surely there must be some way for eBay to set up the system so that those who are not required to pay GST and/or PST, to opt out?

Lorey Simpson

(cobaltbluedragon)

Hi @cobaltbluedragon! The tax team said:

All taxes collected will be remitted by eBay to the appropriate Federal and Provincial taxing authority. After this change, there will be a level-playing field on eBay.ca for all Canadian sellers as eBay will be collecting the tax from Canadian buyers on all purchases shipped intra-Canada. eBay is voluntarily making the change across the board to collect on behalf of all sellers – both registered or not. This change is intended to simplify tax collection for eBay sellers – and to provide one single point of contact for Canadian buyers who may have issues with tax collected.

Canadian buyers may be surprised to see the tax at first, but this requirement to collect the tax will apply for most e-commerce companies and consumers should expect to see the tax on their purchases going forward.

Please note that there is no opt out mechanism. The tax will be applied on all intra-Canada transactions.

lotzofuniquegoodies · ‎05-12-2022

velvet@ebay wrote:
@jwstewart.shaw wrote:
I have a question. Does this apply to all eBay accounts, or only Business accounts?

Because when I called the CRA GST/HST Rulings center today at (800) 959-8287 I was told that it is NOT neccessary to collect GST for the sale of used personal property, by an individual. (He used selling it on eBay or Kijiji as a specfici example) The agent said if I were in the business of seling used goods and had revenue exceeding $30,000 in the last 4 quarters, I would need to collect and remit GST.

So does eBay take into account this long standing and still effective fact that individuals selling thier personal property are not required to collect GST?

Hi @jwstewart.shaw! The tax team said:

This change applies to all eBay accounts. The new rules for digital platform operators such as eBay impose a tax on non-exempt used goods. This new tax applies to both individuals and businesses.

velvet@ebay

As a Canadian seller based in Alberta I am not impressed with the issue in all this is it is entirely based on where the buyer is located. Not where the seller is. If I sell to a customer in Alberta I would charge 5% if I collected tax. If a buyer walks in from a different province they would be charged the same tax. Only because the items is being mailed the upgraded tax is being applied. Doesn't seem right.

As for it levelling the playing field it is only an advantage for larger sellers because they have the volume to reduce their prices. Smaller sellers do not!!!!

-Lotz

sunflowerlaptops · ‎05-17-2022

Oh boy. Now I'm even more confused, ha ha. Thanks for your input, ricarmic & lotzofuniquegoodies. I did those paper forms for years, until a few years ago when it switched online... but the concept and break-down is still the same, as far as reporting your sales and adjustments, how much tax you collected, and how much tax you are claiming on your purchases.

"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."

Not 100% about that. Even as I collect and report GST/HST now, you can't simply take my sales figure, and multiply it by 0.15 (HST for NB), and expect that to be what I should be collecting from buyers. Since I ship 99.9% of my stuff all across Canada, as per the CRA, tax is charged on the (sale + shipping) as per the province in which the item is entering i.e. the buyer's address. The CRA actually contacted me many years ago regarding this, and I explained to them about the nature of my business, and how I export items and charge tax accordingly... apparently they made note of it in my account as I have not been bugged about it since (that works for me).

Anyhoo.... what I'm struggling with is that online GST/HST form... I can still fill everything out, really, as the order details page for each sale (and purchase) shows the sale price, the shipping cost, and whatever tax is collected (or claimed), and I record it in my books. So what I'm confused about, is if eBay is automatically sending 100% of what they (or what I used to) collect as of July 1 to the CRA, how that affects that online form. Guess I need more information, but nobody seems to know for sure yet; it's all speculation and "best guess". Ugh.

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Edit: A reply to your question can be found here.

sunflowerlaptops · ‎05-17-2022

Thanks! Doesn't really address my concern as to how the online form/formula works, but I guess as the time approaches, perhaps more information will be available 🙂 Seeking a refund from the CRA is already how it works - if the ITC "tips" in my favour, they refund me. If it tips in their favour, I have to pay them. Tune in for further details I guess.

#ifthesystemworksnowwhychangeit

lotzofuniquegoodies · ‎05-17-2022

velvet@ebay wrote:

@beavosorus wrote:

Same as was mentioned before, since we don't actually get the tax, how does this effect our Sales Tax Paperwork?

If I collect $1000 in taxes I can use that to offset what I paid in taxes on the raw goods I purchased.

If Ebay collects the $1000 in taxes, what does that do to offset the taxes I paid for the product? Is the govt going to match the difference? If so who reports first?

I have only been collecting sales tax for 2 years and now that I have finally (sort of) figured out what is going on, this is going to create some serious changes on my end.

Hi @beavosorus! 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.

jasmen@ebay

Hello Jasmen,

Will eBay be issueing sellers a detailed summary on a monthly basis of tax collected/credited to CRA or will sellers need to generate a CSV report to try to make heads or tails of what was collected. I've not seen this explained anywhere. If I have missed, my apologies. The majority of sellers do not have an accountant in their back pocket, in their budget or on speed dial.

-Lotzofuniquegoodies.

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Edit: A reply to your qestion can be found here.

ricarmic · ‎05-18-2022

Hi velvet@ebay I'm wondering if anyone got back to you about if it's ok for me to now let my buyers (who i'm currently paying the taxes for) know that the eBay collecting GST/HST will change things for them and to buy now if they want the taxes in still.....I'd like to give them at least a months notice if I can.....THX!

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Edit: A response to your question can be found here.

bikegeez · ‎05-19-2022

I received no email and Ebay is illegally charging me GST and Quebec sales tax. The tax laws are explicit for Canada revenue agency and Revenu Quebec. I receive less than 30,000 gross sales as an amateur hobbyist sellin personal items and am exempt from being charged tax and GST as a seller. Taxes when applicable are required to be paid by the buyer, NOT the seller. and only to buyers within Quebec. International buyers are only required to pay the customs duty of their specific country and for purchases from within their own borders. I have been in contact with my family accountant and the law states explicitly so. I am well below the 30,000 threshold and my total gross sales have been actually less than $1,000.00 for the last 5 months. Ebay is also required to provide a quebec and canada issued paper document stating its collection . It has no legal right to collect any tax arbitrarily without express authorization and a tax permit issued from revenu que. and ca. revenue agency. Simply stating "we have been in contact with tax canada and Quebec" mean nothing without certification from the revenue agencies. That is simply lip service. I want ebay to stop charging taxes on my sales because they have no legal right to do so and are breaking the law 4 instances each time by doing so. Also Canadian tax laws are extremely different than those in the U.S. they are not interchangeable.

Changing tone to plain english this looks like another money grab disguised as a "policy" except this time it is absolutely illegal. After nearly 20 years on ebay and having a 100% positive feedback record I smell a rat.

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Edit: A reply to your question can be found here.

mrdutch1001 · ‎05-19-2022

BUYERS pay the sales taxes; SELLERS pay the FVFs on the TOTAL transaction (which does mean the FVFs are inclusive of the item price,shipping costs,sales tax all of which the buyer paid, plus sellers pay GST/HST on the TRANSACTION as per required to be collected by eBay)

velvet@ebay · ‎05-20-2022

@ricarmic wrote:

Hi velvet@ebay I'm wondering if anyone got back to you about if it's ok for me to now let my buyers (who i'm currently paying the taxes for) know that the eBay collecting GST/HST will change things for them and to buy now if they want the taxes in still.....I'd like to give them at least a months notice if I can.....THX!

Hi @ricarmic! I've not heard back on that yet. Once I have an answer for you though, I'll be sure to follow-up.

Anonymous · ‎05-25-2022

I dont think Craigslist or Kijiji are set up to be able to collect tax.

lotzofuniquegoodies · ‎05-25-2022

velvet@ebay

jasmen@ebay

Forwarded as per Jasmen to this post.

When the new collection of taxes kicks in July it will be July and going forward, will eBay be issueing detailed tax information to sellers on a monthly or quarterly basis or will it be done yearly(End of year?). I know there are some sellers that remit to CRA on different schedules. Lastly will the tax collection for sellers that were UNDER the 30,000 threshhold and NEVER collected in the past be required to remit to CRA for sales from Jan to June. Guessing sellers who did submit would be on 1 system for first half of year and eBay's "system" for the second half of the year. Difficult to have a totally clean rollout of something when it is implemented in the middle of a year. Especially when it comes to anything tax related.

-Lotzofuniquegoodies

Anonymous · ‎05-25-2022

"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."

Thats why I wont sell on eBay after July 1, 2002. By having Ebay collect tax for you to give to the CRA means that your obligated to report your eBay earnings on your income tax for the year you made the money, even though your not a registered business. If you dont, the CRA can probably charge or fine you. I dont trust CRA or Trudeau Liberal government at all.

flipistics · ‎05-25-2022

Thats why I wont sell on eBay after July 1, 2002. By having Ebay collect tax for you to give to the CRA means that your obligated to report your eBay earnings on your income tax for the year you made the money, even though your not a registered business. If you dont, the CRA can probably charge or fine you. I dont trust CRA or Trudeau Liberal government at all.

I'm pretty sure if you buy things to resell for profit, it's considered income regardless of whether you're a registered business (which means you legally have to report it on your income taxes). These new changes don't affect that at all, except possibly making it easier for the CRA to detect it. BTW, insurance companies may also consider reselling (regardless of registration) a business activity, which means they may be able to void your insurance if you get into an accident while doing activity related to that.

mrdutch1001 · ‎05-25-2022

reporting sales income does not necessarily equate to paying income tax on said sales income. So much depends on your income tax bracket and/or for some of us seniors, the threshold of "X" dollars BEFORE having to declare such sales monies...

I hardly think driving to the post office to drop off packages and/or out scouting for items to resell equates to a reason for voiding one's insurance should there be an accident...LOL!