Managed Payments - Ebay Charges 12.3% on Canadian Sales Tax!

[westcoastart2]

Ebay just put my account into Managed payments and I had my first sale that way.

As a Canadian business seller I have to collect GST, PST or HST depending on which province I'm shipping to

Prior to Managed Payments, ebay charged their selling fee (about 10%) on the sales price, and the shipping cost.   Ebay did not charge a selling fee on the sales taxes that I have to collect on behalf of Revenue Canada and remit to Revenue Canada.   Paypal charged their 3% ish fee on the total amount they handled

With managed payments - ebay charged 12.35% (which is a little less than the prior combined ebay and paypal fees)

BUT and its a BIG BUT

Ebay is now charging that 12.35% on the item cost, the shipping cost AND THE SALES TAX

ie ebay is keeping 12.35% of the sales tax that is supposted to go to Revenue Canada

That sounds wrong to me.

[pjcdn2005]

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@fab_finds4u wrote:

I don't  get it when PayPal  charges their fee it includes sales tax and nobody went nuts but eBay does it and all hell breaks loose.

Whoever is collecting and processing the payment from the buyer, be it PayPal or eBay, it goes in the processor's account  and then the payment processor  has to dispurse the money to the various people  awaiting those funds.  If they waived the fee on sales tax then they'd be processing that part of the payment for FREE and I doubt they'd agree to perform a service for free. 

Fees HAPPEN.  Build the fee on sales tax into the asking price of your higher priced items. 

@fab_finds4u 

I understand what you are saying but as someone else pointed out, there is a big difference between paying 2.9% to PP vs 12.35% to eBay on the taxable amounts.

One of thecomments that I've see on the US boards is that if ebay didn't charge an fvf on that amount than the sellers might have to collect and remit the tax to each state on their own so they would rather pay the fvf than do that. 

In Canada ebay does not collect and remit the tax so the sellers that are required to collect tax do keep the money collected and then remit it to the government. 

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[marnotom!]

That was a pretty random response.  Maybe I'll get something better once you re-read my post.

[motomike_canada]

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@westcoastart2 wrote:

I'm not so sure about your reference to sales tax outside of Canada.

The issue is I don't care about foriegn sales tax, because I don't have to collect it and pay it (ebay does that).     IF ebay collects $100 NY sales tax, and keeps $12.3 for themselves, and only gives $87.7 to NY state, that doesn't concern me.     That is between NY state and Ebay.

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Actually... They collect $100 from the customer, and another $12.30 from you, remit $100 to NY Tax Authority and keep your $12.30 for the pleasure of doing so. 

[sniper10000]

I get in country, I think it is lost on U.S purchases  

I sell item for $1000

Old ebay fee 10% fee then 13% Canadian tax added to seller fee. 

Now they went and said we will collect tax....also fine but they said no FEE to sellers. Paypal said talk to eBay and eBay said contact Paypal....that was 2.9% fee and extra .4% if international. 

Ebay NOW says cheaper rates we will charge 2.35% + 10% so 12.35% international add .4% so 12.75%

NOW they collect U.S tax and charge Canadians 12.75% of the tax then have the nerve to charge 13% Canadian tax on that. 

2 sales same amount $1050

1 in Canada.....

1 in U.S

The higher fee is the U.S sale....I say fraud, customs doesnt send send sellers a bill when I pay taxes/duties on my purchases. 

Ebay says our payments only fee to sell 10%

Fee for payment 2.35%

fee for international .4%

Oh wait another country tax and 12.35% and international .4% fees

wait we will tax you on fee for collecting tax also

[ypdc_dennis]

Rules and costs for Managed Payments has changed several times since MP started being rolled out.

Base rate for ebay.ca MP is 12.35% for most categories.  On ebay.com it is 12.55% (14.55% for Books/dvds).

International fee of 0.4% is only for sales by Canadians to Americans (1% for the rest of the world). The fee is higher if you are an American seller.

ebay has been collecting GST/HST on their fees since before MP.  For those registered to collect sales tax this is an ITC deduction.

...

Internet sales tax has nothing to do with American customs.  The majority of USA states now require eBay to collect sales tax and pay the tax to the individual state.  It is annoying that MP is charging a fee of 12.75% (12.35+0.40) on the tax amount versus the old days when sellers paid 3.5% (to paypal, none to ebay) on the USA internet tax portion.   A small increase (less than 1% of the sale price), but it does nibble away at a seller's profits.

-;-

[java735]

Also, I don't understand why do Ebay charge TAX fee on export from Canada  ? which is not subject to TAX ! either GST, HST or PST 

"Tangible goods that when sold are normally subject to the GST/HST to consumers within Canada, alternatively may not be subject to GST/HST when it is an export from Canada.

In case of exported goods, they are referred to as “zero-rated” goods.  Zero-rated goods are actually taxable supplies for GST/HST purposes, they are just taxable at 0%.  As a result, any inputs into the sales of zero-rated goods that are subject to GST/HST, can have the taxes paid claimed as an input tax credit."

But Ebay charge for ZERO-rated Goods !

[pjcdn2005]

Ebay is required by some US states and by some countries to collect tax when a sale is made.  This has nothing to do with the GST or whether or not an item would be taxed in Canada.  The tax is based on where that item is delivered to.

[baybooty]

Actually, I don't think it is legal in Canada to charge a "commission" (fee) on tax.

We ran a small direct sales company that paid it's consultants a commission on sales. We COULD NOT pay them on sales tax just like we couldn't include it in their sales totals.

I think this is illegal...in Canada anyway.

[recped]

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@baybooty wrote:

Actually, I don't think it is legal in Canada to charge a "commission" (fee) on tax.

We ran a small direct sales company that paid it's consultants a commission on sales. We COULD NOT pay them on sales tax just like we couldn't include it in their sales totals.

I think this is illegal...in Canada anyway.

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I have been charging customers Sales Tax (PST then GST, then HST) since the early 1970's. I started accepting credit cards (and later debit cards) by the mid-1970's..........

ALL payment processors charge fees on the total transaction amount INCLUDING any type of Sales Tax.

It is absolutely 100% "legal".

Prior to Managed Payments eBay was not a proicessor and did not charge fees on Sales Tax. When eBay became the payment processor they did not initially charge fees on the taxes but that changed in 2020 when eBay converted to the "simplified" fee structure.

Keep in  mind, the old fees of 10% from eBay and 2.9% from PayPal were combined and REDUCED to 12.35% instead of 12.9%, that 0.55% reduction in fees compensated almost entirely for the fees on tax being applied to the total instead of just the payment processing portion.

[l8e123]

JUST GOT RIPPED OFF MYSELF.  SELLING ON EBAY IS NO LONGER WORTH IT, UNLESS YOU WANT TO MAKE THE OWNER RICH.  GUESS HE NEEDS ANOTHER YACHT, OR A TENTH SUMMER HOME, OR ANOTHER DOZEN EXPENSIVE WATCHES TO KEEP AT EACH SUMMER HOME.  I WAS JUST CHARGED $66.93 FOR ONE ITEM WHICH SOLD FOR $455.00.  BY THE WAY, WHAT'S WITH THEIR USELESS CUSTOMER SERVICE PEOPLE?  THEY ALL SEEM TO HAVE THE SAME USELESS SCRIPT IN FRONT OF THEM AND NEVER HAVE ANY ANSWERS, THEY JUST SPEW THE SAME TIRED LINES.  AND THEN THERE IS THEIR NEW STUPID BANKING SYSTEM, I DIDN'T WANT ANOTHER BANK ACCOUNT, I LIKED PAYPAL, IT WAS EFFICIENT.  THEY ARE NOW JUST AS USELSS AS EBAY, WITH THEIR VERIFICATION NONSENSE, AND FIVE HUNDRED A MONTH WITHDRAWAL RULE IF YOU ARE NOT VERIFIED.  AND THEN I HAVE TO HEAR THAT THIS IS FOR MY OWN GOOD, THAT IT IS THE CANADIAN FEDERAL GOVERNENT THAT MADE THEM DO IT, WHICH IS A LIE.  THEY REALLY EXPECT ME TO BELIEVE THAT THE CANADIAN GOVERNMENT IS GOING TO BE ABLE TO TELL A US COMPANY WHAT TO DO?  THAT THEY WOULD BE ABLE TO MONITOR WHAT THOUSANDS OF PEOPLE TAKE OUT OF THEIR PAYPAL ACCOUNTS AND DECIDE THAT I CAN ONLY HAVE FIVE HUNDRED DOLLARS A MONTH?  DO THEY REALLY BELIEVE THAT PEOPLE ARE STUPID ENOUGH TO BELIEVE THIS?  GO ON LINE AND YOU WILL FIND OUT THAT THE CANADIAN GOVERNMENT HAS NOTHING TO DO WITH PAYPAL.  PAYPAL NEEDS PHOTO ID? WHAT FOR? THEY WOULDN'T EVEN KNOW THAT IT WAS ME THEY WERE LOOKING AT.  THEN I'M TOLD THAT PAYPAL IS LIKE A BANK.  REALLY?  CHECK ON LINE, IT STATES RIGHT THERE THAT PAYPAL IS NOT A BANK.  I THEY WERE THEY WOULDN'T TELL ME WHAT I CAN WITHDRAW FROM MY ACCOUNT.  AFTER 16 YEARS WITH BOTH COMPANIES I CAN'T THINK OF TWO COMPANIES WHO HAVE GIVEN ME MORE CONSTANT PROBLEMS THAN EBAY AND PAYPAL.  I SPENT FIVE MONTHS TRYING TO GET VERIFIED WITH EBAY BECAUSE NOBODY THERE WAS ABLE TO HELP ME, I HAD TO FIGURE OUT WHAT THE PROBLEM WAS MYSELF WITH THE HELP OF MY BANK'S HEAD OFFICE REP.   I EXPECT THAT THINGS WILL ONLY GET WORSE!

[marnotom!]

Change is hard.

Reading a solid block of ALL CAPS TEXT is also hard.

[reallynicestamps]

UNLESS YOU WANT TO MAKE THE OWNER RICH.

EBay is a publicly traded company. It has no single owner , unlike AZ which is controlled if not wholly owned by founder Jeff Bezos.

THEIR USELESS CUSTOMER SERVICE PEOPLE?

The telephone people are subcontractors and have no authority.

You are better off with the eBay employees who respond to Facebook and Twitter complaints.

I WAS JUST CHARGED $66.93 FOR ONE ITEM WHICH SOLD FOR $455.00.

What was the shipping charge?

The MP charge for your buyer's combined payment should be $57.40 for item and sales taxes collected.

The other $9.93 would be the fee on the shipping charge. 

(There is also a non-refundable 30c flat fee on all MP transactions.)

I DIDN'T WANT ANOTHER BANK ACCOUNT,

There is no need for a new bank account, if you have your PP account attached to a Canadian bank chequing account.

I had problems with two of my MP accounts, both with bank information verification. You have my sympathy there.

I did open a new account, but had to use already existing household accounts for those problem setups.

Since eBay is no longer accepting PP as a payment processor for sellers, the information about PP is irrelevant here. However buyers can still use PP to make payments

[kh-leslie]

Hi everyone,

Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.

Thank you for understanding.