eBay

ilikehockeyjerseys · ‎07-22-2020

Scenario:

A Canadian seller who is not a small supplier buys a large lot from a US eBay seller who sells to Canada using the Global Shipping Program. This is a business purchase with the intention of breaking up the lot and selling the items individually. It is not a personal purchase. The Canadian seller pays eBay an "import charge" as part of the Global Shipping Program. Can that seller claim the import charge as an input tax credit against the GST/HST they collect on their sales?

What exactly is the import charge? Is it just a service charge for using the Global Shipping Program. Or, is it actual taxes that are remitted to the Canadian government? If there are taxes involved, how can a seller determine what portion of the import fee is taxes, and what portion is a service fee to eBay?

Thanks.

recped · ‎07-22-2020

It's a bit complicated........

I presume you want to come up with a number to use as an Input Tax Credit.

You can calculate the amount of GST, it will be based on the price of the item itself not including any shipping. You are in Ontario so the rate is 13% so 13% of the item purchase price.

BUT!!!! (and it's a big one)

You will never have and won't be able to get any documentation to back up your claim so if you have a GST audit your ITC's might be disallowed (plus interest and penalties).

Pitney-Bowes who run GSP for eBay has a position on this, they state in their terms of use that GSP is only to be used for B2C transactions, they do not and will not break out the charges nor will they provide a CRA Business Number.

"What else could I do? I had no trade so I became a peddler" - Lazarus Greenberg 1915
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marnotom! · ‎07-22-2020

@ilikehockeyjerseys wrote:

What exactly is the import charge? Is it just a service charge for using the Global Shipping Program. Or, is it actual taxes that are remitted to the Canadian government? If there are taxes involved, how can a seller determine what portion of the import fee is taxes, and what portion is a service fee to eBay?

I suppose you could look at it as a "service charge". Pitney Bowes (administrators of the Global Shipping Program) is the importer of record on a GSP shipment, which means they're the ones who are responsible for paying the taxes and duties (if applicable) due on an item forwarded through the GSP. The "import charges" are the mechanism for paying Pitney Bowes back as well as all the processing, clearance and other sundry charges associated with a casual import.

I'm no accountant or legal expert on this stuff, but my understanding is that the best way to deal with the import charges if you're number-crunching for commercial reasons is to treat them as a business expense.