eBay

ricarmic · ‎11-20-2019

Perhaps I wasn't paying close enough attention but I noticed today that the tax flow through is also happening for Australian buyers now (and on the email notification the eBay ABN number isn't showing anymore).

It functions the same way as for US buyers, the tax is on the receipt and immediately deducted in PAYPAL as with the US sales.

I'm simply posting incase someone else like me missed that it was happening with Australia too...

lotzofuniquegoodies · ‎11-20-2019

Thanks @ricarmic for relaying this. The way it was being displayed previously for the few random sales sellers was working fine. Sad it had to changed. I guess transparency is no longer an option. To prevent the risk of a buyer being double charged ABN number should be shown on the customs invoice. Will just need to keep that in the back of our minds going forward.

-Lotz

ypdc_dennis · ‎11-20-2019

@lotzofuniquegoodies wrote:
.... To prevent the risk of a buyer being double charged ABN number should be shown on the customs invoice.

Unlikely. Australian customs ignores stuff valued under $1000 for sales tax purposes (which is when ebay collects the sales tax).

That said, I always add the ABN to the package info just to be safe.

-..-

femmefan1946 · ‎11-20-2019

Makes me wonder if eBay set up the tax this way to encourage sellers to switch to their own Managed Payments system.

MP is more expensive than PP in one way. While PP charges 30c for each payment they process, MP charges 29c for each transaction.

So if you sold three things paid at the same time, you would pay 87c to MP but only 30c to PP.

sylviebee · ‎11-20-2019

Not only eBay and Australia, but I've noticed that RL also charged tax and a "service fee" for an item going to Singapore so it looks like the system isn't limiting itself to the USA.

I wonder how the GSP is going to fit into this whole process? For example, if a UK seller uses the GSP to ship to the US, I wonder if the system has a go around for that? (Really wondering if maybe the GSP might provide a buffer for Canada because we could be next.)

Also, does anyone know how PP is handling this? That is, if I send someone a PP invoice for an item is PP adding tax as well, and perhaps also a service fee?

lady.stark · ‎11-20-2019

Thanks for the info! This is really beginning to be a real PITA - being charged fees on money we don't even handle and that is NOT our responsibility.

Will GSP items being paid through PayPal will also charge American and UK sellers a fee on the taxes we Canadians pay? Probably not... eBay would be flooded with complaints! Which makes me think us Canadians are really not important to eBay.

pjcdn2005 · ‎11-21-2019

As far as I know, PayPal wouldn’t be adding tax because they aren’t a marketplace and aren’t required to collect tax.

pjcdn2005 · ‎11-21-2019

@lady.stark wrote:
Thanks for the info! This is really beginning to be a real PITA - being charged fees on money we don't even handle and that is NOT our responsibility.

Will GSP items being paid through PayPal will also charge American and UK sellers a fee on the taxes we Canadians pay? Probably not... eBay would be flooded with complaints! Which makes me think us Canadians are really not important to eBay.

The import fees that a gsp buyer pays goes directly to Pitney Bowes, it doesn’t ever go into the sellers account so the seller wouldn’t pay fees. But I’m sure that PB is paying some type of transaction fees to PayPal on that amount.

lady.stark · ‎11-21-2019

@pjcdn2005 wrote:
@lady.stark wrote:
Thanks for the info! This is really beginning to be a real PITA - being charged fees on money we don't even handle and that is NOT our responsibility.

Will GSP items being paid through PayPal will also charge American and UK sellers a fee on the taxes we Canadians pay? Probably not... eBay would be flooded with complaints! Which makes me think us Canadians are really not important to eBay.
The import fees that a gsp buyer pays goes directly to Pitney Bowes, it doesn’t ever go into the sellers account so the seller wouldn’t pay fees. But I’m sure that PB is paying some type of transaction fees to PayPal on that amount.

Probably, but my point is: eBay is able to seperate the payments. They should be able to do it for us too when the payment is processed by PayPal. Why can't they do it?

hlmacdon · ‎11-21-2019

@lady.stark wrote:
Probably, but my point is: eBay is able to seperate the payments. They should be able to do it for us too when the payment is processed by PayPal. Why can't they do it?

They can and they were. They just chose to transfer the costs to us to optimize their bottom line and spare their call centers some calls.

To answer the other poster's questions, paypal doesn't have a marketplace collection responsibility, they aren't a marketplace. If you aren't selling on a marketplace your tax collection liabilities are whatever is appropriate for your own business situation. If a retailer has a tax obligation then sales taxes will flow through whatever payment processor they use, but a given payment processor has no idea what your tax obligations are. This situation is highly unusual in that ebay (or other marketplaces) are the ones with a tax collection obligation but they are using seller accounts to offload some of that cost burden, which frankly at their level has a number of state provided incentives/allowances.

Most large sellers active in the niches I sell in that were once ebay exclusive have since moved a lot of their transaction volume off ebay which is not proving difficult given the financial incentives for the buyers. Most are just setting up a shopify site then dumping their feeds into ebay and not investing much time in ebay. A lot of folks are seeing large drops since ebay is continually breaking their best match algorithm.

lady.stark · ‎11-21-2019

@hlmacdon wrote:
@lady.stark wrote:
Probably, but my point is: eBay is able to seperate the payments. They should be able to do it for us too when the payment is processed by PayPal. Why can't they do it?
They can and they were. They just chose to transfer the costs to us to optimize their bottom line and spare their call centers some calls.

That's what I realised while going to work this morning after writing my message. They don't want to pay fees on those taxes they are collecting and just transfer the bill to sellers. Although I'm sure they could - if they wanted to - make some kind of agreement with PayPal.

It also got me thinking... from a seller point of view... how do you justify such taxes going through your account, but not remitting them yourself? If CRA does an audit on your business, how can you justify those taxes and the fees associated with them? I'm not a lawyer, but I'm pretty sure that what eBay is doing is completely illegal....

hlmacdon · ‎11-21-2019

@lady.stark wrote:

That's what I realised while going to work this morning after writing my message. They don't want to pay fees on those taxes they are collecting and just transfer the bill to sellers. Although I'm sure they could - if they wanted to - make some kind of agreement with PayPal.

It also got me thinking... from a seller point of view... how do you justify such taxes going through your account, but not remitting them yourself? If CRA does an audit on your business, how can you justify those taxes and the fees associated with them? I'm not a lawyer, but I'm pretty sure that what eBay is doing is completely illegal....

It was previously setup so there were two separate charges for the buyer, one the standard transaction minus sales tax that went to our account normally, then a separate transaction that never hit the our account for the sales tax amount.

The accounting end is something I'd ask an accountant with respect to the broader implications. The taxable amount is reversed out of your account but it is included in your gross revenue numbers on all paypal statements and none of their reporting breaks out that marketplace sales tax amount outside of csv extracts. It is a question of the amounts that show up on any records that they would be sharing and how they separate out any sales tax amounts collected on eBay's behalf on those records, if at all. The marketplace tax amounts should be separated out as line items that clearly identify them on all statements. That is easy to implement and it is beyond me why paypal hasn't revamped their reporting module to pull those amounts into a separate field for their statements.

If you were collecting Canadian sales tax it would be the same situation with respect to reconciling and determining your year end amounts , so it is a question of more busy work. On the sales history csv files they show up in the sales tax column for the related transaction followed by a "Partner fee" debit to remove them, so you can tally them at year end. We have no liability for remitting and we aren't collecting, that's completely down to ebay and paypal for accessing your account to do so. You might consider giving the CRA a ring and asking them if they are aware of the practice and what, if any, recommendations they would have for your own record keeping.

In short they have made a mess of our paypal reporting and statements. Noting less than you would expect out of the pathetic US executive leadership.