GST/HST on eBay Fees?

[pierrelebel]

Coming to Canada soon?

http://www.ecommercebytes.com/cab/abn/y15/m01/i07/s03

[cumos55]

Is it possible that CRA's ruling has been misinterpreted?

[pierrelebel]

"Is it possible that CRA's ruling has been misinterpreted?"

Valid question. 

Unfortunately none of us have ever seen the CRA "ruling" nor the question(s) asked from CRA leading to that written response.  Without consulting both the written question(s) from the registered seller and answer(s) from CRA, it is impossible to provide an informed opinion.

This question of ITC on eBay (and PayPal) fees has been kicked around by this seller for many years. Different posts have addressed the issue and questioned it over the years.  I do not recollect ever seeing the actual text of those documents.

Maybe, one day, they will be made available to us.

[cumos55]

For all sellers registered to collect GST/HST.....

Look at your invoice for fees from eBay...

Answer three questions

(1) Is there an entry for GST or HST  in the invoice?

(2) Does eBay say that GST/HST is included in all prices?

(3) Is there any mention of GST/HST anywhere in the invoice?

If you have three answers of "No"...

then one concludes there is no Input Tax Credit.... 

no matter what someone who is NOT Canada Revenue Agency says.....

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My invoice for November 15, 2015  was checked... and I get three answers of "No"

[anguscoinshop]

You are not a business, you wont see anything, you have the eyes of Judas.

[maggiebvintage2010]

"anguscoinshop" - Will you please reply directly to my questions to you - post #34 - thank you.

[anguscoinshop]

Re; "anguscoinshop" - Will you please reply directly to my questions to you - post #34 - thank you

Sorry, i never read your post.

Well OMG, there's a member on this board that just about fully understands the whole thing. Well done and thank you.

The same rule would apply to other business that are fee based with the key # of $150+ per month, if you want to get a letter for each one of them that is up to the individual business to decide.

When you get the letter, the ruling division makes there decision(s) very clear on the why and conditions.

I guess each decision would somewhat defer  depending on the content of your letter.

Hope this helps.

[pjcdn2005]

Why $150/month? I don't remember seeing that earlier (other than in maggie's post) and it doesn't make sense to me because you don't have to spend a specific amount from anyone else in order to claim the itc.

[cumos55]

To: Angus Coin Shop... from reply #44

I quote ...You are not a business, you wont see anything, you have the eyes of Judas.

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My business is registered in the province of Manitoba.

I have a business number, and am registered with CRA to collect GST/HST.

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Please be careful what you say.... and my name is not Judas.....

I follow the rules of CRA  as do the others here who visit this discussion.

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A representative of eBay has stepped in twice to confirm...... 

first in reply #10 and again in reply #26....

that ..... eBay Canada does not charge any sales tax on eBay fees

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[cumos55]

To: Angus Coin Shop

with respect  to my three questions in reply #43...

----------------------------------------------------

Look at your invoice for fees from eBay...

Answer three questions

(1) Is there an entry for GST or HST  in the invoice?

(2) Does eBay say that GST/HST is included in all prices?

(3) Is there any mention of GST/HST anywhere in the invoice?

---------------------------------------------------------

Everyone can see their own invoice

Angus Coin Shop.......What are your answers to these three questions?

[cumos55]

and finally...

To anyone who comes here and reads this discussion.

If you have a question with respect to GST/HST.

Please contact Canada Revenue Agency  and be careful  as.......

The Answer one gets is based on the question that is asked...

and do submit a copy of your invoice with the question.

Does eBay collect taxes on the fees they charge to sellers?

[anguscoinshop]

Dear cumos55

I really admire and appreciate your opinions, its the Canadian way.

But be careful not to overdo it, let the folks form there own opinion.

As for me it is a business decision and I've taken the proper steps to be protected when an audit comes as it did.

 Now, as i mentioned i appreciate the fact that you are a staunch protector and supporter of ebay.

As i mention its all business witch is money; 2015 so far my ebay fees $1188.48 x 13 divided by 113 = $136.72 ITC, its not much but over the years it accumulated enough to be able to make a mortgage payment. I'll take my house over anything else at anytime.

In these day and age when we are nickeled and dimed to death it is important to fight for every penny. 

c55 you have decided to give away what you are entitled to by law, i respect your decision.

Please stop pushing your opinions onto others.

Angus Coin Shop

[maggiebvintage2010]

pj - it's mentioned in Posts 5 & 7.

[cumos55]

Input tax credit information requirements
Information required Total sale under $30 Total sale of $30 to $149.99 Total sale of $150 or more
Your business or trading name or your intermediary's* name / ✓ ✓
The invoice date or, if you do not issue an invoice, the date on which the GST/HST is paid or payable ✓ / ✓
The total amount paid or payable /
An indication of the total amount of the GST/HST charged or that the amount paid or payable for each taxable supply (other than zero-rated supplies) includes the GST/HST at the applicable rate / ✓
When you supply items taxable at the GST rate and one of the HST rates, an indication of which items are taxed at the GST rate and which are taxed at the applicable HST rate / /
Your Business Number or your intermediary's Business Number / /
The buyer's name or trading name or the name of the buyer's duly authorized agent or representative ✓
A brief description of the goods or services /
The terms of payment /
*An intermediary is a registrant who, under an agreement with you, makes a supply on your behalf, or causes or facilitates the making of the supply by you.

[cumos55]

Where is that reference to $150?

The CRA document ...  General Information for GST/HST Registrants.... at

http://www.cra-arc.gc.ca/E/pub/gp/rc4022/rc4022-13e.pdf

was examined.

Reference to $150 was found on page 14  in a  table entitled

Input Tax Credit Information Requirements.

This table identifies  what is required in an invoice, with that requirement falling into three categories.

(1) Total sales under $30

(2) Total sales of $30 to $149.99

(3) Total sale of $150 or more.

These are specific requirements for an invoice,  dependent on the total sale  presented in that invoice.... in order to claim an Input Tax Credit.

[pierrelebel]

re post 46  "with the key # of $150+ per month,"

What does $150 have to do with your eligibility for ITC on services where no tax was actually remitted to CRA by the supplier of service?

[cumos55]

The value of $150 relates to what information must be provided in an invoice.

(1) One of the requirements in that page 14 table in that CRA document states...

    An indication of the total amount of the GST/HST charged or that the amount paid or payable for each taxable supply (other than zero-rated supplies) includes the GST/HST at the applicable rate

(2) Someone has read this and concluded that eBay collects more than $30,000 in fees each year and eBay must collect GST/HST.

(3) eBay has a business number.

(4) eBay does not specify a specific number for GST/HST in an invoice

Conclusion......  The amount payable includes the GST/HST at the applicable rate.

To his advantage a Canadian seller on eBay concludes that the amount eBay charges as fees ... includes GST/HST

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The Error is that ..... The invoice does not come from within Canada..... 

The invoice comes from Bern Switzerland... from outside Canada... GST/HST is not applicable in this situation

Also there is no business number in the invoice....also a requirement indicated by CRA in that Table in their document.

and... There is no statement specifically indicating that the Fees total includes GST/HST..

[pierrelebel]

Hi cumos.  I know that.  You know that. We all know that. 

My question was addressed specifically to anguscoinshop quoting from his post and would appreciate a reply from him to explain why that amount of $150 is "key" to claiming ITC on unpaid tax.

[raphael@ebay.com]

Hello everyone,

Since I'm just a product manager and to make sure I was 100% sure when I replied, I got in touch with our tax department and now I'm 100% sure.

eBay International AG, the entity who emits your seller invoices, is a company registered in Switzerland. It has no Canadian tax numbers registered, neither at the provincial nor at the federal levels. The fees charged for selling on eBay Canada do not include any tax what so ever.

It would be illegal, as some of you pointed out, for us to hide tax into our fees.

I hope this helps clarify things.

[cumos55]

We as Canadian sellers on eBay get our invoice from Bern Switzerland.

Why Bern Switzerland?

eBay has sites in 27 countries across this world of ours.

Each Country has its own tax system......

Switzerland  has been recognized as a money-handling country.....  the reality of a Swiss bank account..... where many people have chosen, in years past, to "hide" their money.

If anything the taxation in Switzerland may be simple... or there may be no tax that is levied on eBay fees to Swiss sellers.

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Then we look at Canada.... PST, GST,  and HST..  relatively simple.....  but still quite complex.

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How about the US?

Here is an interesting read.

https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States

There are several tax levels..... Federal ... State, and even municipality within State.

Some states have no tax, while others have different taxes for different commodities.... then municipalities  can have their own tax

structure.

The US tax structure is extremely complex.

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This is Switzerland, Canada and the US.......  but there are eBay sites in  24 other countries, each with their own tax structure.

eBay simplified  the taxation of fees by having their location in Switzerland handle all invoicing...In this way  eBay does not have to deal with taxation of fees, Country-by-country.

and... perhaps  the fees in Switzerland are not taxed.  In this way,  all eBay sellers are treated equally when it come to taxation of fees....

No taxation of fees  worldwide, except for perhaps Switzerland  and ...  maybe ... not even this one country.

No taxation of eBay fees worldwide...

[pierrelebel]

"The invoice comes from Bern Switzerland... from outside Canada... GST/HST is not applicable in this situation"

Actually where the invoice comes from is irrelevant to GST/HST as long as the GST/HST registered vendor.  There are thousands of GST/HST registered vendors residing outside Canada and they are required to remit GST/HST to Ottawa and show the amount of tax paid and their registration number on their invoice or receipt.

The fact eBay.ca is owned by eBay international in Switzerland or anywhere else in the world is irrelevant to the GST/HST question.  For example, if you subscribe to "Business Week", a magazine published in the USA and mailed from the USA. you will be charged GST/HST as the business is registered to collect and remit GST/HST as the product (magazine) is deemed to be used (read) in Canada. And the same is true of most large American magazines or many large mail order businesses such as LL Bean for example.

However, the service provided by eBay-Canada is not taxable because it is provided by servers located in the USA (San Jose specifically).  The fact they have a small office in Canada does not change the taxable nature of the service they provide.