Sale taxes questions

[vip-marketplace]

Hi!

I just downloaded all my PayPal transactions for my eBay sales and have a few questions regarding sale taxes.

I do not charge sale taxes - they are "included in my prices" and I try to stay competitive.

If I sell something for 100$ in Ontario - do I owe 13$ in taxes or is it ok to assume the taxes are included in my prices i.e. 100 - 100/1.13 = ~11,50$ and sale price for my income tax report would then be ~88,50$.

Does PayPal fees include taxes GST/HST that I should ask for a reimbursement?

What about Canada Post labels purchased through PayPal? Do these include taxes?

Thanks!

[fatdane · Accepted solution]

First of all - are you registered for GST/HST? If you are not you can not collect GST/HST. 

If you are registered for GST/HST, the formula to calculate HST in Ontario on a tax included in price item would be "price times 13 divided by 113". For a Province that does not have an HST( BC for example) the formula would be "price time 5 divided by 105".

The "friendly" folks at CRA will try to answer most questions about GST/HST . 

On just about any purchase you have made in Canada you will have paid GST or HST. The seller should have given you a receipt showing the amount of tax paid ( unless it was included in the price) and their GST/HST number. This would include Canada Post.

Collection and remittance of GST/HST is completely separate from Income Tax, but your sales total for income tax would be for the price sold less GST/HST, remembering that sales outside Canada are what is called "zero rated" - there is no GST/HST.

You should try look up postings from Pierre Lebel, a retired stamp dealer and former accountant who has posted a lot about GST/HST and Income Tax.

Do not try to "mess around" with the GST/HST folks. If you comply you will have the occasional audit but if you do not comply they can come down on you like a ton of bricks.

[ypdc_dennis]

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@vip-marketplace wrote:
What about Canada Post labels purchased through PayPal? Do these include taxes?

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Taxes are included in paypal labels for Canadian shipments -- and are indicated in the calculations when the purchase is made. However, the paypal summary only shows the total paid, not the details.

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@vip-marketplace wrote:
Does PayPal fees include taxes GST/HST that I should ask for a reimbursement?

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 Paypal does not charge GST/HST on fees.

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[pjcdn2005]

The email that you should teceive when you have printed a label through PayPal will show the taxes charged by CP

[vip-marketplace]

Thanks guys! 🙂

[vip-marketplace]

One more thing - does eBay fees include any taxes I should ask to be refunded?

Final value fees?

Anchor subscription fees?

Thanks! 🙂

[pjcdn2005 · Accepted solution]

No eBay does not charge tax on any type of fees.  If they did you would see them on each invoice.

[luxe.labels]

But they will be as of July 1st: 

http://pages.ebay.ca/seller-centre/news/seller-updates/2017summer/ebay-canada-limited.html