eBay will start collecting taxes on our behalf effective July 1st?

[vip-marketplace]

Hey guys!

Am I understanding this correctly?

Stating on July 1st, I no longer be receiveing taxes from my Canadian clients? (similar to my US sales?)

Have you guys filled the form they sent us?

Did you print it, fill it, scan it and sent it to the e-mail address they provided (CanadaGST/PST@ebay.com)?

Thanks!

[doc_scribe]

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@ricarmic wrote:

Today if one of us sells ONLY to USA folks, then when we fill out our GST forms, all of our sales are ZERO rated, so you show all your sales as you would today, no GST collected because they were all zero rated and the ITCs would turn out to be 100% refunded. I don't know for sure how it is going to go onto the forms, I suspect it will be like zero rated items. I have occasion to have to call the GST folks someday soon, I'm going to ask them about this when I catch up to them and hopefully get some direction that way.

...which was my primary reason for asking ricarmic, and thank you in advance. Just trying to avoid - or stall - that conversation with CRA myself, but will likely do so anyway.

Until CRA clarifies how they expect us to begin reporting this,  it will be rather uncomfortable suddenly filling in $0.00 GST collected/due on a couple of thousand bucks in quarterly sales, when, for my entire 20 years of selling on eBay I have always reported the GST on my Canadian purchases...even when my total yearly gross remained under their $30,000 threshold. 

You read that right; I routinely shortchanged my own ITC refunds simply to avoid ever having to deal with the question of Canadian POS taxation until something like this was implemented at the platform level (which I always felt was inevitable, and am still surprised it took this long).

Theoretically the billing agent authorization puts something in place that allows us to show the sales and relative $0 GST/HST collected.

The INRs and SNADs will be the exact same as happens with the USA folks today regarding the IST (Internet Sales Tax) they have that ebay collects. eBay refunds the taxes because they're the one who collected them. The process for this has been in place for US and international purchases for some time

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Of course, that's how it should work and probably will, but do we know that for a fact?

My own suggestion to CRA will be a new "eCommerce" line on the GST/HST form to identify sales via third party providers who handle the collection, reporting, and remittance of sales taxes on our behalf.  A simple 6-digit code would probably work...

[ypdc_dennis]

These are not zero rated sales. The buyers will have paid Canadian sale tax on their ebay purchases.

If ebay has been set up as an agent, ebay will be paying the government the tax money collected to your sales tax number.

You file the usual sales tax forms and get any overpayment back.  Just an extra bookkeeping step to keep track of ebay handled taxes (and making sure that ebay does it correctly).

-;-

[doc_scribe]

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@ypdc_dennis wrote:

These are not zero rated sales. The buyers will have paid Canadian sale tax on their ebay purchases.

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Oh I agree, as already noted. 

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@ypdc_dennis wrote:

If ebay has been set up as an agent, ebay will be paying the government the tax money collected to your sales tax number.

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But I live in a province without a harmonized sales tax. GST is all that I've ever reported and reconciled against my ITCs each quarter.  For eBay to even collect provincial HST, they must be doing so under their own provincial registrations because I've never qualified to do so.

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@ypdc_dennis wrote:

You file the usual sales tax forms and get any overpayment back.  Just an extra bookkeeping step to keep track of ebay handled taxes (and making sure that ebay does it correctly).

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Why would any seller elect to do this - or should even consider doing so - for something that we do not have a hand in at any stage of a transaction? What I guess I'm getting at is, since my yearly sales on eBay are well under $30k for all regions, I see no value or point in allowing eBay to use my CRA business registration for any of this.

And for the record, my GST business number was originally set up for contract services in a totally unrelated field. For the sake of simplicity, I'm inclined to simply decouple that number from all eBay activity and reserve it for my contracting only.  

Or is there some trap-door here that I'm missing? 

[ricarmic]

@ypdc_dennis 

My thoughts on this:

"If ebay has been set up as an agent, ebay will be paying the government the tax money collected to your sales tax number.

You file the usual sales tax forms and get any overpayment back.  Just an extra bookkeeping step to keep track of ebay handled taxes (and making sure that ebay does it correctly)."

As I understand it, eBay is utilizing some form of 3rd party software, approved by the government/CRA that identifies the correct tax amounts to be applied.

I noted that the form we filled out has an "obligations" section that says that we and ebay are solidarily liable for a few points, the one that worries me says "reporting and remitting the net tax, as well as any amount that the agent (ebay) might neglect to remit and that is reasonably attributable to a supply (sale) covered by the election." What does that mean? It doesn't mention failing to collect, only remit.

I've mentioned in other threads that I'm regularly seeing sales to the UK for example where some are and some aren't having the VAT paid by the buyer (sometimes 2 separate sales to the same buyer, one does one doesn't). I can't imagine that we're supposed to police the taxing, even if we are, for one that is missed, we can't later go and try to get the buyer to pay the taxes. So it will be interesting to see what we're supposed to do if we identify problems.

The filing of the usual tax forms is the part that may be complicated, or it might not. The billing agent covered sales aren't zero rated, but my suspicion is that they will be treated like zero rated sales on the "forms". The forms at least that I see/use, have total sales (101), GST/HST collected by us (105) which would not include the eBay collected amounts, and ITCs (108). (other lines as well but nothing identifying what is rated vs zero rated sales). Theoretically in the future state, total sales is the same as today, GST/HST is whatever we've collected on NON-ebay sales, and ITCs are the same as today. The gap between total sales and actual GST/HST collected will be much larger or complete depending on how much of ones total sales are on ebay. We will have whatever ebay reporting there is regarding the tax amounts collected and remitted by eBay to justify the ebay portion of our sales that we didn't remit taxes for (this is the same as we would have to do for zero rated sales today, I know this from first hand experience this year).

Certainly the CRA "bots" are going to have to adjust their parameters for identifying accounts that need to be better "explained" because a much larger portion of remitters will be experiencing this across the various online selling platforms.

[doc_scribe]

Just FYI, some related links from the CRA site:

Notification and information reporting: GST/HST for digital economy businesses - Canada.ca

Definitions for the digital economy - Canada.ca

Confirming a GST/HST account number - Canada.ca

[doc_scribe]

One other regarding simplified GST/HST accounts:

Confirming a simplified GST/HST account number - Canada.ca

[shaedw9595]

Will Ebay send us a statement at the end of the year with the amount of GST submitted on our behalf? And would we claim it as an installment on our GST return?

[reallynicestamps]

But I live in a province without a harmonized sales tax. GST is all that I've ever reported and reconciled against my ITCs each quarter. For eBay to even collect provincial HST, they must be doing so under their own provincial registrations because I've never qualified to do so.

Yes.

YOU are no longer collecting or remitting the provincial taxes.

EBAY is collecting and remitting the provincial taxes.

The buyer is paying the provincial taxes.

[boxbrnd]

For the link to the form, is that universal to all sellers in Canada? I am a seller based in Ontario and I want to clarify whether the Quebec info should really be there when I submit my form to ebay. I still wasn't sent a form to fill out from ebay.

[recped]

The prefilled info relating to QST applies to everyone (that is why it's prefilled).

Keep in mind the important thing that it's not YOUR location but rather the location the shipment is going to that matters.

[recped]

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@shaedw9595 wrote:

Will Ebay send us a statement at the end of the year with the amount of GST submitted on our behalf? And would we claim it as an installment on our GST return?

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If you want to know the amount collectted by eBay you can find it in a transaction report.

I do not believe you will need to report that amount. Unless the reporting form is changed from the current one you would simply report your gross revenue, amount of GST/HST collected by YOU (not eBay) and the amount of any ITC's that you have. For most people that means you will always be getting a refund rather than having the remit the difference between ITC and GST/HST collected.

[ricarmic]

Today I was able to get in contact with a CRA CSR, who was familiar with the billing agent authorization stuff occuring here, so that was good news. Also meant I wasn't the first person asking.

This is what I got from the CSR. I am putting out here what I got from our conversation. As we all know with contacting CSRs, one doesn't always get the same answer from CSR to CSR so I'm not asserting that this is the correct answer but it is what I was told.

On the reporting forms as has been suggested in other threads the eBay sales are treated the same as zero rated sales, ie if we sold $10,000 GST/HST taxable on ebay then we would have $10,000 in sales but no taxes acquired by us (same as would be if we sold $10,000 to US customers as zero rated sales). Everything else like ITCs are the same as today.

He was very quickly and abundantly clear that I and eBay were solidarily liable for ensuring the taxes were collected and remitted, and that is was my and eBay's problem to fix if some were missed, so I'm going to put a special all on it's own question on the other thread asking what we're specifically supposed to do if we notice a transaction that wasn't assessed taxes that should have been.

I did ask as well what us folks that are having to pay quarterly installments need to do given we will now seriously overpay what we need to pay with the eBay change if we continue to pay the quarterly installments as is. As I understand it (again I can't assert this is correct) the important thing is that at the end of the year you've paid as much tax as you owe. I didn't specifically ask at the time about the definition of what "tax you owe" meant, but I expect it means the actual amount owed if it is lower than/or the total of ones quarterly installments which was the projected amount. I know that you can go over the projected amount, ie owe extra above the total of projected quarterly amounts and that is ok as long as you've paid the projected amounts during the year.  So my plan is to probably not pay this quarter and perhaps next quarter then in December I'll pay enough to make sure I'm paying at least as much tax as I owe or whatever the total of the quarterly installments was. Otherwise he was clear that if one doesn't pay enough one gets fined and it is a paperwork pain (for me).

So there you have it.

[ilikehockeyjerseys]

Adobe has an app on Android (possible iOS as well) called Adobe Fill and Sign. It allows you to fill in the text areas, and you can also sign the form by drawing your signature using your phone's touch screen. 

[lotzofuniquegoodies]

Posted only as an FYI. Disclaimer attached to a US seller on the River regarding US taxes collected.

Sales tax is not separately calculated and collected in connection with items ordered from xxxxxx xxxx through the River site unless explicitly indicated as such in the ordering process. Items ordered from xxxxxx xxxx may be subject to tax in certain states, based on the state to which the order is shipped. If an item is subject to sales tax, in accordance with state tax laws, the tax is generally calculated on the total selling price of each individual item, including shipping and handling charges, gift-wrap charges and other service charges, less any applicable discounts. If tax is separately calculated and collected in connection with items ordered from xxxxxx xxxx through the River Site, the tax amounts that appear during the ordering process are estimated - the actual taxes that will be charged to your credit card will be calculated at the time your order is processed and will appear in your order confirmation notification. (Edited as required)

-Lotz

[reallynicestamps]

Interesting, but not something I would tell a customer standing at my cash register.

She probably flee into the night if I did.

KISS.

Don't interrupt the flow.

 But it could be handy to keep on file (like  @ricarmic 's boilerplate letters) for the occasional Karen (or Kevin) who just can't believe they need to pay taxes. Ever.

[biglittleape]

For those that emailed the filled form, did you get any kind of confirmation back?  I emailed my form almost a week ago and have not received any confirmation that my form has been received/processed.

[recped]

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@biglittleape wrote:

For those that emailed the filled form, did you get any kind of confirmation back?  I emailed my form almost a week ago and have not received any confirmation that my form has been received/processed.

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I have not received any acknowledgment, wasn't really expecting one.

[ricarmic]

Well I am expecting something back, they have to "sign" the form, presumably we need a form signed by both parties from a CRA perspective.

It would be nice to have news regarding what will be happening, I'm trying to be patient 😉 

PS I sent my form in on June 2nd now word back.

[recped]

It's eBay that needs the form, it's really a pretty useless document for sellers.

As far as what is happening, come 00:00:01 on July 1st your tax table will become redundant, eBay will be collecting end of story.

One thing, I know there are at least a few GST registrants that post here who have been using "tax included" pricing, they will need to decide if they are going revise their pricing downwards or put it in their pockets. I have never sold on a tax included basis so there is nothing for me to consider changing (and no possibility of windfall).

[marnotom!]

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@recped wrote:

It's eBay that needs the form, it's really a pretty useless document for sellers.

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The form may be going to eBay and eBay may need some of the information on it, but it's issued by Revenue Canada/Revenue Quebec and they'll definitely need it.