Sales Tax on used items sold with in Canada

[33nhl]

I dont know if this subjet has been discussed before or even chalenged.

Today i talked to an Ebay Rep at the Toronto Expo Show although they were from the USA was told that with in Ebay account if your account is not a business and you list items as used they techinicially should not be sales tax if the buyer is with in Canada, if the buyer is in a different country then different rules apply.

But i have noticed every single item i sell used or new the buyers with in Canada are paying sales tax.

Is this wrong???

I have looked into tax regulation for sales with in Cnaada and clearly states if items are personal items and not brand new then no sales tax should be applied when a buyer is from Canada. I even have asked a tax accountant regarding sales tax ruling and was told same thing, so why are buyers being charged sale tax, i think there has to be away when a person list an ithem and is used that no tax should be applied to upon sold.

[mrdutch1001]

"should not be sales tax if the buyer is with in Canada,"

Whomever you talked to is Totally wrong!

Sales tax is applicable to Canadian buyers as per Canadian Law when pertaining to Marketplace Facillitators!

and BTW, Never trust what someone from the USA tells you about Canadian Taxation and/or Canadian laws!

eBay is a Marketplace Facillitator and as such is required by Canadian Law to collect taxes on goods sold on eBay, whether new or used, and whether for personal or business purposes.

BTW, is this "tax accountant" aware that eBay is a Marketplace Facillitator and actually knows the Laws as they pertain to Marketplace Facillitators?

[femmefan1946]

And used items are still subject to sales taxes, since those tax the sale not the item. 

Just as you paid sales tax when you bought that third hand Subaru.

This also applies to charities.

[brettjet38]

(Cut, Paste, Repeat as needed)

Then contact your local MP as it was your elected officials who put this in place, It has nothing to do with eBay...

If you already did not know & evidently you do NOT...

This TAX collection system was planned by your elected Canadian Government, not eBay!

It was in the 2021 Canadian Budget, you did read it right, as a voter you should always read what is going through the system in the pork rind, CBC and most mainstream media only tells you the "things" the GOV wants to be publicized...

Also, it applies to all "online marketplaces" Amazon, Etsy, and all others. 

Any marketplace "Facilitator" that makes over $30,000.00CDN in sales has no choice other than to charge and collect the tax, this is not an eBay thing, it's a Government thing, put in place by the people you elected and put into office...

If you have an issue you can contact your local MP.

BTW - This is actually a worldwide thing, the UK, USA, Australia, and a whole slew of others already have a similar tax and many more shortly will.

And, yes it applies to USED GOODS sold through a "marketplace facilitator"

And the TAXES you are paying are based on the entire amount of the transaction you conducted on eBay, that's the Goods & Services bit...

This is the same thing I post every time I see this SALES TAX nonsense, the issue is not eBay it is YOU for not reading about what your government plans and not reading eBay policy about fees charged...

[brettjet38]

Sales tax is a worldwide THING, almost...

https://www.globalvatcompliance.com/globalvatnews/world-countries-vat-rates-2020/

TAX on TAX on TAX on TAX makes the world go around, the world go around...

Country	Standard VAT/GST Rate	Reduced Rates
Algeria	The standard sales tax (VAT) rate is 19%.	A reduced rate of 9% applies to certain industries
Antigua and Barbuda	No VAT tax but standard sales tax is set at 15%	Reduced rate of 14%
Andorra	The standard rate is 4.5%, although a higher rate of 9.5% applies to banking and financial services.	Αndorra has three additional IGI rates: A reduced rate of 1%, a special rate of 2.5%
Argentina	The standard VAT rate is 21%. (enhanced rate of 27% for several metered utilities)	Reduced rate of 10.5%
Armenia	The standard VAT rate is 20%.
Aruba	There is no VAT as such in Aruba, although there have been calls from the International Monetary Fund for the introduction of such a levy. (A combined rate “GST” can be considered to be at 7%)
Australia	Australia has a Goods and Services Tax (GST) which is equivalent to a VAT. The standard GST rate is 10%.
Azerbaijan	The standard VAT rate is 18%.
Bahamas	Standard VAT rate of 10%
Bahrain	From January 1, 2022, the standard VAT rate is 10%.
Bangladesh	The standard VAT rate is 15%.	10%, 7.5%, 5%, 2,4%, 2%
Barbados	The standard VAT rate is 17.5% (Super rate of 22% mobile voice & text services)	A reduced rate of 10% applies to the provision of hotel accommodation
Belize	There is no value-added tax as such. Belize instead introduced a General Sales Tax in January 2006, which applies to a wide range of goods and services at a 12.5% rate.
Bermuda	There is no VAT in Bermuda.
Bolivia	The standard VAT (IVA) rate is 13% under Article 15 of the VAT Law
Botswana	Since April 2023 the standard VAT rate is 14%
Brazil	Brazil imposes a state tax equivalent to VAT (ICMS) This rate is imposed by each state and is subject to a limit set by the federal senate. The rates can vary in the states from 17% to 18% (Rio de Janeiro has 20% as an exception). and the highest rate can typically reach 25%.	7%
British Virgin Islands	There is no VAT in the British Virgin Islands.
Brunei	There is no VAT in Brunei.
Bulgaria	The standard VAT rate is 20%.	A reduced VAT rate of 10% applies to hotel accommodation and the tourism sector
Canada	The standard federal Goods and Services Tax (GST) rate is 5%
Cayman Islands	There is no VAT in the Cayman Islands.
Chile	The standard VAT rate is 19%.
China	The standard VAT rate is 13%, 9%, 6%	Reduced rates of 5%, 2%, 3%, 1.5% and 0.5%.
Colombia	The standard VAT (IVA – Impuesto sobre las Ventas) rate is 19%	5%
Cook Islands	The standard VAT rate is 15%,
Costa Rica	The standard VAT rate is 13%, the same rate as the sales tax.	4%,  2%, 1%
Curaçao	There is no VAT in Curaçao. (Sales tax is 6% with enchanced rates of 7& and 9%)
UAE	VAT is charged at 5% in the United Arab Emirates (UAE)
Ecuador	The standard VAT rate is 15%
Egypt	The VAT rate is 14%	5%
El Salvador	The standard VAT (IVA) rate is 13%
Equatorial Guinea	The standard VAT rate is 15%	6%
Ethiopia	The standard VAT rate is 15%
Faroe Islands	The standard VAT rate is 25%
Georgia	The standard VAT rate is 18%
Gibraltar	There is no VAT in Gibraltar.
Guatemala	The standard VAT rate is 12%
Guernsey	There is no VAT in Guernsey
Hong Kong	There is no VAT or sales tax in Hong Kong.
India	The primary rates of Indian GST are 0.25%, 1.5%, 3%, 5%, 12%, 18% and 28%
Indonesia	The standard VAT rate is 11%
Iraq	There is no VAT in Iraq. (The standard sales tax ranges from 9% to 300% on alcohol & tobacco)
Isle of Man	The standard rate of VAT is 20%	5%
Israel	The standard VAT rate is 17%
Japan	The standard (Consumption Tax) rate is 10%	8%
Jersey	The standard Goods and Services Tax (GST) rate is 5%.
Kazakhstan	The standard rate of VAT is 12%
South Korea	The standard VAT rate is 10%
Kuwait	There is no VAT in Kuwait
Laos	The standard VAT rate is 10%
Lebanon	The standard VAT rate is 11%
Malaysia	On September 1, 2018, the Government of Malaysia replaced the Goods and Services Tax (GST) with a 10% Sales Tax (The standard rate of service tax is 8%)	5% (Sales Tax)
Mauritania	The standard VAT rate is 16%
Mauritius	The standard VAT rate is 15%
Mexico	The standard VAT rate is 16%	8%
Morocco	The standard VAT rate is 20%	7% 10% 14%
New Zealand	The standard Goods and Services Tax (GST) rate is 15%
Nigeria	The standard VAT rate is 7.5%
Oman	the standard VAT rate in Oman is 5%
Pakistan	Pakistan does not have VAT. The standard sales tax rate is 18%	Pakistan has a large number of reduced sales tax rates, including 1%, 2%, 5%, 10% and 12% (among others).
Panama	The standard VAT rate in Panama is 7% and there are supplementary rates of 10% and 15%
Peru	The standard VAT rate is 18%	Effective September 1, 2022 until December 31, 2024, a 8% reduced rate will apply to micro and small suppliers of restaurant, hotel, and tourist accommodation services that receive at least 70% of their income from these supplies.
Philippines	The standard VAT rate is 12%
Puerto Rico	The sales and use tax (SUT) rate is 11.5%	1%
Qatar	There is no VAT in Qatar
Russia	The standard VAT rate is 20%	10%
Saudi Arabia	VAT is charged at 15%
Samoa	VAGST rate of 15%
Singapore	The standard Goods and Services Tax (GST) rate is 9%
South Africa	The standard VAT rate is 15%
Sri Lanka	The standard VAT rate is 18%
Taiwan	The standard VAT rate is 5%
Tanzania	The standard VAT rate is 18%
Tajikistan	The standard VAT rate is 14%	10%, 7%, 5%
Thailand	The standard VAT rate is 7% (Reduced from the standard 10% until 30 September 2024)
Tunisia	The standard VAT rate is 19%	7%, 13%
Turkey	The standard VAT rate is 20%	10%, 1%
Turks and Caicos	There is no VAT in Turks and Caicos
Ukraine	The standard VAT rate is currently 20%	7%, 14%
Uganda	The standard VAT rate is 18%
United Kingdom	The standard VAT rate is 20%	5%
Uruguay	The standard VAT rate is 22%	10%
USA	There is no VAT in the USA. U.S. state sales and use tax rates vary between 2.9% and 7.25%	Reduced rates are offered for sales of specific products.
Uzbekistan	The standard VAT rate is 12%
Vanuatu	The standard VAT rate is 15%
Venezuela	The standard VAT rate is 16%	8%
Vietnam	The standard VAT rate is 8%	Reduced VAT

[marnotom!]

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/digital-ec...

[lotzofuniquegoodies]

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@femmefan1946 wrote:

And used items are still subject to sales taxes, since those tax the sale not the item. 

Just as you paid sales tax when you bought that third hand Subaru.

This also applies to charities.

---

@femmefan1946 

@33nhl 

MCC Thrift in Calgary does not charge tax. Speaking to someone in Mb states similar with several of the thrift stores they deal with regularly.

MCCC is a registered charity within the meaning of the Income Tax Act (Canada) and is exempt from income taxes. ... MCC Thrift shops

Does goodwill charge GST?

Since we are a charitable organization, we do not charge you GST or PST. Additional 20% discount for seniors & post-secondary students every Tuesday. Great bargains!

We could try to go into how certain items are either tax exempt or are taxed at reduced rates but unfortunately we know how well that has not gone over.  eBay just decided it was 1 size fits all...end of story. Technically most groceries in Canada are tax exempt and those too get sold on ebay.  PST does not apply to childrens clothing in BC from a B&M store.

-Lotz

As a side this statement shows up as a Reddit post.

Even charities who sell things and where their sales exceed the GST/HST threshold, they must charge and submit taxes. They are exempt from paying taxes on their income. They pay HST on their purchases.Mar 4, 2023

[lotzofuniquegoodies]

As per eSeller dated  July 2022.

https://eseller365.com/ebay-canada-to-collect-sales-taxes-july-1-2022/

Re: Input tax credits. Was there EVER clarification on this from eBay directly for Canadians?

This appears similar to tax-exempt sales in the United States. eBay has a method to handle such sales in the United States but as of today, it’s unclear how eBay will handle that in Canada.

Official eBay follow up for situations like where regulations are about to kick in down the road seems to be a little lacking especially when it is requested by many multiple times.

[femmefan1946]

MCC Thrift in Calgary does not charge tax.

There is no provincial sales tax in Alberta.

The BC Salvation Army is charging BC provincial sales tax. (We do not have a harmonized sales tax.)

Neither organization shown is charging GST.

In 2022 there was still question about how these sales taxes would be implemented.

This was the clearest article I could find about the situation - note that the date is 2022.

https://www.bdo.ca/insights/canadian-sales-tax-online-sales

[lotzofuniquegoodies]

@femmefan1946 

I just know there have been times AFTER something was announced or implemented sellers had asked repeatedly for followup clarification and it would never be responded to. I think for many that were considering claiming the tax they were left in a nightmarish quandry on how to move forward.

Re: that article you attached. No follow up for Canada from eBay. eBay left Canadian sellers on hold. Made even worse because the tax collection started in 2022. It's now end of 2024. Also it skips any mention of items that are exempt or at different rates. Guess it was just easier for eBay to go the all route. 

Making sense of our sales tax patchwork

GST/HST was intended to be a national sales tax system that applies uniformly across the country. That is clearly not the case today. Despite the government's best intentions, businesses with customers in Canada face a variety of rates and rules based on jurisdiction. For online retailers who easily sell across provincial borders, this tax patchwork makes it even more important to remain up-to-date on sales tax changes across the country.

-Lotz

[lotzofuniquegoodies]

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@femmefan1946 wrote:

MCC Thrift in Calgary does not charge tax.

There is no provincial sales tax in Alberta.

The BC Salvation Army is charging BC provincial sales tax. (We do not have a harmonized sales tax.)

Neither organization shown is charging GST.

In 2022 there was still question about how these sales taxes would be implemented.

This was the clearest article I could find about the situation - note that the date is 2022.

https://www.bdo.ca/insights/canadian-sales-tax-online-sales

---

@femmefan1946 

Here is the original info page from eBay 2022. I was able to locate using a google search.  Unable to tell or know if revisions were ever made because help pages are not dated.

https://pages.ebay.ca/salestax2022/

Typing tax responsibilities or collecting sales tax in eBay help does not bring up the same page. When searching help what comes up is entirely a lottery with no guarantee of winning.

-Lotz

[33nhl]

This is why Ebay went managening the payments thus they could collect tax at every single item new or used, thus they would increase there profit margins at the same time, as they do make $$$ collecting all them sales tax for all countries that have requested. I think would be easy for Ebay to make changes to distinguish items as being NEW or USED but they dont wnat to do cause thye would loose $$$$ revenue and many would try to cheat the sytem by selecting as used item with in each listing mean while the item could be brand new.

But after speaking to the EBAY rep at the Expo show i am going to look into this matter very deeply as he told me each country has different laws thus Ebay Cnaada should be able to do that, just like in USA some states have no sales tax thus buyers dont pay sales tax on items they buy, unless they buy from an actual online business that has to collect tax for its province/state/country.

So if we are not a business and sell used items technically then should be no sales tax added to sales.

[mrdutch1001]

The taxation process isn't about eBay>The taxation isn't unique to eBay....The Taxation applies to Marketplace Facillitators including eBay,Etsy, Amazon,etc...

"after speaking to the EBAY rep at the Expo show" > a USA rep who really knows nothing about Canadian law and/or Canadian taxation processes and is guessing it "could" work similar to the USA...

apparently this rep knows knows nothing about the application of taxes pertaining to Marketplace Facillitators..

"i am going to look into this matter very deeply" >Good Luck with that! and be sure to return to this forum with how successful you have been to find information that contradicts the taxation process pertaining to Marketplace Facillitators..

[marnotom!]

If you consigned your used item and the consignee was registered to collect and remit GST/HST/PST, the sale of your item would be subject to those taxes.  Same if you donated it to Value Village.

Sales of used automobiles are also subject to taxes, and in many if not most provinces you can't licence your vehicle unless you've paid those taxes even if the sale is a private one.

If you sell your item on eBay other digital marketplace (@mrdutch1001  uses the American term "Marketplace Facilitator")  in Canada where the marketplace acts as a payment intermediary, the marketplace is responsible for collecting and remitting the taxes due on the sale.  The status of the seller as an individual or business is irrelevant.

Either there was a misunderstanding in the conversation you had with the eBay rep, or the rep was out to lunch.  As Rick Mercer demonstrated decades ago, some Americans seem to like talking at length about things they know nothing about.

[ilikehockeyjerseys]

Used vs new has no designation on whether sales tax should be charged. This is a misconception. There is no law in place that says goods are only taxed when new and can be sold untaxed used. 

The need to charge taxes has to do with whether someone is engaged in business activities, and whether that business is considered a small supplier. The very simplified version is that a small supplier is a business that has done 30,000 or less in revenue over four consecutive quarters. Once a business exceeds that threshold, they are required to register to collect taxes on purchases. Keep in mind, that a single person can be a business, aka a sole proprietor.

Prior to July 2021, eBay sellers had the option to charge taxes based on their status as a business. Starting in July 2021, digital platform operators were required to charge and remit the appropriate taxes. Because of that, eBay charges and collects taxes on all domestic sales for Canadians regardless of whether the seller is registered to collect taxes. The only designation is that if the seller is also registered to collect taxes, they need to sign the appropriate paperwork that states eBay is collecting the taxes on their behalf. 

The days of garage sale selling online are over with. Even if you sell personal goods at a loss, you should always keep documentation to support that in case you are ever audited. Things like e-transfers too, you should make the person write exactly what they are for "my share of our takeout from so and so on July 1". 

(I am not an accountant, the above could be wrong and is not a substitute for professional legal/accounting advice. I know I don't technically have to put this disclaimer...) 

[ilikehockeyjerseys]

eBay charging taxes is not directly eBay's choice. It has to do with Canadian law that took effect in July 2021. Every online platform made that change. Even if eBay did not institute the managed payments system, that change still would have happened. 

It is my understanding that eBay would break the law if they did not charge taxes with all online sales. The same thing goes for Etsy, Amazon, etc. 

I am not dictating how you should feel about the change in law, but you are placing the blame on the wrong party. It's a government issue. Write to your MP.