Taxes on sales in Canada

[bellefeuille1976]

I know the system has changed since July of ‘22 when it comes to taxes in Canada, but is it normal that Ebay charges the buyer sales tax and the seller tax as well?? I just noticed this week a sale that charged the buyer sales tax of 5.85 which brought the sale to 50.85 and then deducted sales tax and fees from my before tax sale of 45! Is this normal as CS wasnt much help 😞 kinda seems like double dipping?? Help

[mrdutch1001]

When selling an item the applicable tax is charged to the buyer on the total of the transaction and those taxes are submitted by eBay as per Canadian law, to the resulting provincial & Canadian taxation departments... and then the applicable taxes to the fees from that sale are charged to the seller. These are two different taxation processes...

[bellefeuille1976 · Accepted solution]

Yes I see this now, I made a mistake and see the difference now.

[flipistics]

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@bellefeuille1976 wrote:
I know the system has changed since July of ‘22 when it comes to taxes in Canada, but is it normal that Ebay charges the buyer sales tax and the seller tax as well?? I just noticed this week a sale that charged the buyer sales tax of 5.85 which brought the sale to 50.85 and then deducted sales tax and fees from my before tax sale of 45! Is this normal as CS wasnt much help 😞 kinda seems like double dipping?? Help

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Yes, this is normal. The tax the buyer pays goes to the government directly but eBay includes it in the full transaction which sometimes confuses people. This is between the buyer and seller (with eBay handling the tax portion in between). The fees we pay are between eBay and the seller. It's a completely separate transaction and therefore has to be taxed separately. This is only charged on the fees though (and probably hidden in the eBay labels shipping which is supposed to be broken out by law and isn't).

If you sell enough, you may want to think about getting a GST/HST tax number. That will allow you to recover part or all of the tax you pay on fees, supplies, possibly inventory, etc. It adds up quick.

[gren262]

So if I sell enough, I should get taxes numbers to get my taxes back on my purchases. But Can I ad these numbers in my Ebay file somewhere. So the gouvernement will see my taxes on sales because all is collected by Ebay.

[reallynicestamps]

The GST and PST is on goods and SERVICES.

Any taxes are part of the fees.

All those fees including the taxes eBay sent to the governments are tax deductible.

You don't have to break them out when you prepare your income tax.

If you are a business registered to collect GST/PST/HST/QST you do get the taxes on goods for resale returned.

Consult your tax accountant about how they will calculate this.

[flipistics]

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@gren262 wrote:

So if I sell enough, I should get taxes numbers to get my taxes back on my purchases. But Can I ad these numbers in my Ebay file somewhere. So the gouvernement will see my taxes on sales because all is collected by Ebay.

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There is a form you fill out (eBay countersigns it) which gives them permission to collect and remit the taxes on your behalf.  They are remitted under eBay's tax number and don't show up in your CRA business account.  In theory this should work the same as if you consign with someone to sell your goods (like an auctioneer). Obviously both parties don't have to collect and remit the taxes as that would be double taxation, but they do have to be collected and remitted by one of the parties.

If you are unsure though, you should consult a tax professional because I'm certainly not one.

Keep in mind that if you get a GST/HST number, you also have to collect and remit taxes on things like local sales or sales on other platforms.