@Anonymous wrote:
We are a GST/HST registered company and collect applicable taxes in Canada and have done so for more than 35 years.
If ebay is going to collect and remit the taxes that we are suppoed to collect and remit what kind of a mess of paperwork is that going to create?
I can't imagine RevCan is onboard with it and I am sure going to check. If it happens It will throw off our reporting requirements as well and will no doubt trigger audits.
Finally, since I am about done with ebay anyway I will add my biggest problem with them.
They calculate fees based on shipped and taxed total which can result in a cost of sale to sellers of over 30%!! 30% of the selling price of the item!!
This happens if the item price is lower or equal to the shipping cost and the sale is made to a province that collects the highest HST @ 15%.
EXAMPLE: Sold $35 Shipping $38 Tax 15% equals $83.95. Fee is 12.9% plus $.30 Equals $11.13 or 31.8% of the $35 selling price. No one has any margin left on a sale like that period. Yet ebay says their fees are low?
Now add the fact that a non registered seller does not get the Tax back on the fee as we do and their cost would be $11.13 plus tax. In ON that would mean $12.58 total or 35.69% of the selling price!
Hi @Anonymous! These are some good questions and the tax team has come back with answers:
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. 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 are paid by the buyers. The collection, compliance, and remittance will now be handled by eBay.
This would not represent a change in fees for those sellers who are current day required to collect GST/HST/PST/QST. Fees are imposed on the total sale price paid by the buyer, inclusive of shipping and taxes. Fees will continue to be imposed on the total sales price.
Note that current day, non-registered sellers are charged tax on fees. Non-registered sellers may see an increase in fees as the total selling price will increase to include the tax paid by the buyers on the underlying good. However, the intention of this change by the CRA and Provincial authorities, is to impose the burden to collect the tax on large companies such as eBay, and not small sellers.
