eBay

alwayscollector · ‎03-26-2018

I am from Canada and recently learnt that Bay is now charging me 11.5% final value fee on both final price and shipping cost since July 1, 2017 rather than just 10%. I have been told that it is because eBay is now charging me the GST and PST on my sales.

However, as a seller, you have to charge GST/PST only if you sell over a $30,000 limit per year; since I never did sell for such an important amount, how do I get a refund from eBay for the GST and PST they did and still do collect from me ?

momcqueen · ‎03-26-2018

The sales tax is being charged on YOUR seller fees. Not your buyer’s orders.

rose-dee · ‎03-26-2018

I'm sorry, but I think you're misunderstanding both situations.

First, the GST/HST charged on sales: This was not a move imposed by eBay (for once), but by Revenue Canada after eBay finally registered as a business corporation in Canada. Once a corporation (eBay) registers to do business in this country, they must charge the applicable GST/HST on goods and services to their Canadian customers or users (that is, to us sellers). EBay has absolutely no control over this now. And eBay was certainly obliged to register if it wanted to incorporate in Canada, as it does make over $30K per annum.

The amount of GST/HST you pay on your eBay fees will depend on which province you live in. Be glad you're not in Nova Scotia (where I am) -- here the HST rate is 15%. The reasons behind eBay's actual registration in Canada are murky, but I suspect there may have been some pressure brought to bear on them by the Canadian government (who wanted the tax revenue).

Understand that eBay is not gaining anything from these taxes. It's collecting them from us and submitting them to the Canadian government. We Canadian sellers have been getting away with paying no taxes on our eBay fees for years because eBay was a foreign corporation, not formally registered in Canada.

Second: Getting GST/HST Reimbursed: You can't avoid paying GST/HST taxes on your eBay fees now, but you can register as a business for GST purposes and then claim Input Tax Credits ("ITCs") as part of your annual income tax return. You would then have a large part, if not all, of the GST/HST your business has paid refunded to you after filing your return. It is a complete myth that your business must earn more than $30,000 in gross sales in order to register for GST purposes. Any small business can register voluntarily, at any level of sales. But keep in mind that once you do register, you will have to charge GST/HST to your Canadian buyers on every sale, based on the applicable GST/HST rate in their province (or else -- depending on how many Canadian buyers you get -- pay it yourself as a courtesy on behalf of your customers, i.e. "GST included" pricing).

Whether the time and trouble of doing all this, and the accounting complications and paper work involved is worth it will depend on the actual amount of GST/HST you'd expect to get back in ITCs. If you don't do a lot of purchasing for your business that involves paying GST/HST and you have a fairly low annual sales volume, it may not be worth your time.

Don't forget that you will be able to claim the total (including taxes) you pay in eBay fees on your business income tax return as an expense, so it isn't a complete loss.

Personally, I tend to think I've gotten away with a tax freebie on eBay for many years, and now my business has to contribute its fair share of paying taxes just like everybody else.

rose-dee · ‎03-26-2018

@alwayscollectorwrote:
I am from Canada and recently learnt that Bay is now charging me 11.5% final value fee on both final price and shipping cost since July 1, 2017 rather than just 10%. I have been told that it is because eBay is now charging me the GST and PST on my sales.

By the way, what province are you in? Some provinces have HST (harmonized sales tax), which lumps GST and PST for that province together (such as my province, Nova Scotia). Others don't, and you will only have to pay GST in those instances. So I suspect you're in a province with an HST tax rate, which is why you're paying the combined rate.

I'd be very surprised if eBay was making an error in the actual amount of tax collected, but if you think that is the case, I'd suggest you look into what is actually payable in your province in terms of GST, gather some information, and take it up with the eBay Canada representative at the next Wednesday chat.

alwayscollector · ‎03-26-2018

@rose-deewrote:
It is a complete myth that your business must earn more than $30,000 in gross sales in order to register for GST purposes. Any small business can register voluntarily, at any level of sales.

My understanding is that if your sales income exceeds the $30,000 threshold for any four consecutive quarters, or in any quarter, you must register for GST purposes. If below $30,000, it is not mandatory. Since my sales income has never exceeded (and never will) that threshold, and since I will never need nor want to register for GST purposes, how can I escape from that 15% tax that eBay is charging me above my 10% final value fee (making it a 11.5% fee)? Btw, my province is QC if that changes anything.

femmefan1946 · ‎03-26-2018

how can I escape from that 15% tax that eBay is charging me above my 10% final value fee

It's the same tax you pay on the purchase price for a dress, or a set of winter tires, or Happy Meals for the whole family.

You can escape it by---- leaving the country?

The GST is a tax on most Goods and Services you buy while resident in Canada.

The provincial sales taxes vary but again are applied to your purchases while in Canada.

alwayscollector · ‎03-26-2018

@femmefan1946wrote:
how can I escape from that 15% tax that eBay is charging me above my 10% final value fee

It's the same tax you pay on the purchase price for a dress, or a set of winter tires, or Happy Meals for the whole family.
You can escape it by---- leaving the country?

The GST is a tax on most Goods and Services you buy while resident in Canada.
The provincial sales taxes vary but again are applied to your purchases while in Canada.

You obviously did not understand my question... I am the seller, NOT the buyer........

hlmacdon · ‎03-26-2018

@alwayscollectorwrote:
@rose-deewrote:
It is a complete myth that your business must earn more than $30,000 in gross sales in order to register for GST purposes. Any small business can register voluntarily, at any level of sales.
My understanding is that if your sales income exceeds the $30,000 threshold for any four consecutive quarters, or in any quarter, you must register for GST purposes. If below $30,000, it is not mandatory. Since my sales income has never exceeded (and never will) that threshold, and since I will never need nor want to register for GST purposes, how can I escape from that 15% tax that eBay is charging me above my 10% final value fee (making it a 11.5% fee)? Btw, my province is QC if that changes anything.

Register and declare the income and you'll be able to reclaim the GST as input tax credit. That is your only alternative if you want to sell on ebay and recoup those amounts. Ultimately if your sales will never exceed the threshold requiring you to register you have to decide for yourself if a slight increase in your costs is a more attractive proposition than your Canadian buyers having to pay sales tax.

ypdc_dennis · ‎03-26-2018

@alwayscollectorwrote:
@femmefan1946wrote:
how can I escape from that 15% tax that eBay is charging me above my 10% final value fee
...
The GST is a tax on most Goods and Services you buy while resident in Canada.
The provincial sales taxes vary but again are applied to your purchases while in Canada
You obviously did not understand my question... I am the seller, NOT the buyer........

You are the BUYER of eBay services and are taxed accordingly. GST, HST and QST are charged on your eBay fees based on where you are located.

...

The only way to completely avoid the tax on eBay fees is NOT to sell on eBay.

-..-

ricarmic · ‎03-26-2018

Regarding: You obviously did not understand my question... I am the seller, NOT the buyer........

Just to hopefully clarify:

ebay is only charging you the GST/HST on the fees they charge you to sell your stuff.

(ebay began to charge HST on their fees a few months ago)

If you advertise in a newspaper, the cost of the ad has HST added to the ad cost.

If you sell on ebay (now) the cost of the selling fee has HST added to the selling fee cost.

Whether or not the buyer pays GST to you depends on whether you collect it but that is something else.

rose-dee · ‎03-27-2018

@alwayscollectorwrote:
My understanding is that if your sales income exceeds the $30,000 threshold for any four consecutive quarters, or in any quarter, you must register for GST purposes. If below $30,000, it is not mandatory. Since my sales income has never exceeded (and never will) that threshold, and since I will never need nor want to register for GST purposes, how can I escape from that 15% tax that eBay is charging me above my 10% final value fee (making it a 11.5% fee)? Btw, my province is QC if that changes anything.

That's correct, over $30,000 and you must register; under $30K is voluntary. So what I was pointing out earlier was that, as a voluntary registrant, you can still benefit from claiming ITCs, just like the big guys, and get most, if not all of your GST/HST back from the government.

Thus far Revenue Canada hasn't closed that voluntary registration door. The benefit for them in leaving it open is that such registrants are then obligated to charge GST/HST to their customers in Canada, which I would assume nets the federal government more money than they have to pay out in ITCs.

So yes, it is possible, even as a small seller, to almost completely offset the payment of GST/HST on any of the goods and services your business purchases (remember, eBay listing fees are payment for a service). The downside is the time and accounting complications involved in being a GST registrant.

If your actual GST/HST paid out on eBay fees in a year is minimal (i.e. if your sales volumes and pricing are very low or you only do occasional selling off of personal items), then it may not be worth the trouble. On the other hand, if you're paying hundreds of dollars a year in GST/HST, whether on eBay or elsewhere, the ITCs are well worth getting in exchange for your time spent. It's up to you and your particular situation. As I said, don't forget that your total fees paid to eBay, including the GST/HST, are expenses for business purposes.

Being in Québec, your GST + PST situation is unique, so you'd need to consult the Québec government websites and/or the federal GST information. I'm afraid I know very little about the Québec arrangement.

cumos55 · ‎03-28-2018

That $30,000 dollar value for registering to collect GST/HST includes....

Sales plus postage....

When a buyer pays it is paying for the total of purchased item plus postage... one single dollar value, which includes the appropriate tax

The seller then purchases postage..... which includes GST, HST or QST as an input tax credit

It also is important to read the Canada Revenue Agency website about GST/HST/QST and then the Quebec website as Quebec is so much different that the other provinces/territories.

inspyre.design · ‎01-13-2022

I am in the same boat.
It's 2022 now, do we just eat the whole GST thing?

lotzofuniquegoodies · ‎01-13-2022

@cumos55 wrote:
That $30,000 dollar value for registering to collect GST/HST includes....

Sales plus postage....

When a buyer pays it is paying for the total of purchased item plus postage... one single dollar value, which includes the appropriate tax

The seller then purchases postage..... which includes GST, HST or QST as an input tax credit

It also is important to read the Canada Revenue Agency website about GST/HST/QST and then the Quebec website as Quebec is so much different that the other provinces/territories.

As a side note GST/PST/HST are not charged on the actual shipping by CP or when you use a courier to USA/internationally. Unable to confirm if it is charged when you use eBay labels. It shouldn't be in those situations. Only on the fees in the calculation of any eBay fees collected. (GST/PST/HST where applicable.)

recped · ‎01-13-2022

Regarding GST/PST/HST

eBay does not charge or collect PST on anything (GST/HST only)

Canada Post does not charge PST unless possibly (not sure) you buy postage in a PST province that is being sent within that province.

Provinces with separate PST

BC

SK

MB

QC (QST)

"What else could I do? I had no trade so I became a peddler" - Lazarus Greenberg 1915
- answering Trolls is voluntary, my policy is not to participate.

marnotom! · ‎01-14-2022

FWIW, the three western provinces do not levy PST on postal products and services under any circumstances.

cumos55 · ‎01-14-2022

When eBay became a Canadian company. with a location for a business in Canada, they registered with the Canada Revenue Agency, and started collecting GST/HST on fees, and fees only.

eBay does not charge GST/HST on the total of sold item and shipping......Only and only on the fees that eBay charges for each transaction by a Canadian seller.

This GST/HST collected by eBay, on fees, becomes an Input Tax Credit for the sellers that are registered with the Canada Revenue Agency and collect GST/HST on each transaction, which includes item sold plus shipping.

reallynicestamps · ‎01-14-2022

ZOMBIE THREAD FROM 2018

The problem with zombie threads is that the information may be out of date and inaccurate.

cumos55 gives the current status of taxation on fees.

datsuncars · ‎05-02-2022

This just shocked me. I have been with EBAY for years and finally decided to sell something. Total sale value was $850 CAD but I received only $630 after fees and taxes! I am gobsmacked. That concudes my selling on Ebay. Does ETSY have similar draconian cash grabs? I assumed EBAY was like any classified ads but it seems to force every seller to act as a business.

mrdutch1001 · ‎05-02-2022

Although Etsy's initial fee structure is somewhat lower than eBay, when all is said and done there is little difference...Listings are good for 4 months but there is a 25c CDN per item listing fee.

On Etsy you have: Listing fees @.20cUSD/Transaction fees @6.5% on TOTAL transaction/Processing fees @ 3-4% plus .25c ...Etsy uses same paymewnt processor as eBay(Adyen)= must have a bank account,etc.

ALL sellers new or otherwise are subject to 75% payment holds on sales monies for up to 90 days ...at Etsy's discretion...