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 Replies: 32 / Views: 8,019 |
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Pillar of the Community
 Canada
5391 Posts |
Starting on July 1st , ebay will begin collecting the applicable Taxes , GST or HST on the FEES for Listing your items and the final value FEES and your monthly store FEES depending on what province or territory you live in. Certainly levels the playing field for registered businesses competing with the so called Private , I am selling my own collection types with mega amount Listings. Also at present there are several sellers , both ebay and Prominent bricks and Mortar collectors stores, Coin dealers amongst them , undergoing either CRA Tax audits, Fintrac audits , Desk audits or the lovely , GST/HST, and Provincial tax audits. Having gone through a Provincial Sales Tax audit when I had my bricks and mortar store back in the day it is a no fun Pain in the ...l Lately in the Lower Mainland the Provincial Tax people had a little visit to one of the larger flea markets asking to see Provincial sales tax numbers.  A heads up to all Canadian Coin Sellers out there on the Bay make sure you have proper records and get registered for the GST/HST and provincial sales Tax in your jurisdiction. Sales of 30 K or more , you need to be registered For HST/GST. In BC the limit for PST is only 10 K. Edited by Pacificoin
05/09/2017 4:21 pm
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Valued Member
Canada
395 Posts |
This may be a little confusing for people. To clarify ebay will be collecting taxes on the ebay fees based on your location. |
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Pillar of the Community
 Canada
5391 Posts |
No confusion at all ! .....The real message is the TAX Authorities are coming soon to a location near you. I am sure Many eBayers remember the Power Seller battle from 2004 to 2009 with the CRA winning a major court battle forcing ebay to turn over all the records , names and addresses of Canadian Power Sellers. |
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Pillar of the Community
Canada
3049 Posts |
Pacificoin: could you please provide a link to this info... I have a few questions but want to read up on this first...
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Pillar of the Community
Canada
2984 Posts |
Do the changes apply to everyone or only those with a store? I only have on average 20 listings and maybe sell 1 or 2 item a week.
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Pillar of the Community
Canada
1192 Posts |
There are two different issues here. 1) This new ebay seller update means that starting July 1st 2017, ebay will be charging sales tax on their invoices for seller fees. e.g if you're an ebay seller (with store or not), you'll be paying your local sales tax rate on the fees you pay to ebay. In the past, ebay has gotten away with not collecting sales tax on their services, but no longer. The Canadian Government is now requiring them to charge it. Those who have a GST/HST number for their business of buying and selling coins will be able to offset these taxes as ITCs when they remit their sales tax to the CRA. 2) A separate issue: the CRA is actively seeking out sellers who cross the threshold for "hobby" income who do not have a GST number/are not charging sales tax when they should be. This is the commonly quoted "$30,000 in a year" number. It is more complicated than that, with a certain amount of a single or multiple quarters can push a seller into the "should be charging sales tax" area. As Pacificoin mentioned, the CRA has ebay seller records going back a very long time. If the CRA deems a seller to be operating as a business, they can and will audit and come after the sales tax that should have been collected by that seller. So all these sellers who are calling themselves "private" sellers who do not need to charge sales tax on their sales, can very easily be held liable for the sales tax owed to the government on past sales. I am not a tax expert, but anyone who sells a reasonable amount of coins/collectibles/anything, should look into doing the right thing and registering as a business with a GST number. This also opens the door for many write offs, so there are many upsides as well. |
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Pillar of the Community
Canada
3690 Posts |
Excellent post. Pokermandude. Well said and clearly you hit on the relevant issues.  Not being an ebay seller, I'm surprised they have avoided charging GST/HST on their fees for so long. They also sent e-mails today changing the user agreement for Canadians to essentially contract with a new, Canadian based entity as of July 1st. I would assume these changes are related. |
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Pillar of the Community
Canada
1984 Posts |
Pacificcoin, I am not sure why you are so upset about private sellers not paying taxes. They are simply following the Canadian law and doing exactly what our government expects of us. Also, they have no real advantage over you as a tax paying seller. What they gain by not charging tax they lose by not getting the input tax credits. Most hobbyists (like me) more or less break even on this stuff...I buy a collection to get something I want and I sell off the rest. I charge no tax but I claim no credit. I could go trough the trouble of doing a lot of paperwork and charge the tax and claim an offsetting input credit. The government still gets no net cash but we all deal with a lot of paperwork. Then I would charge tax but I would just in effect cut the prices by the same amount, because, assuming that buyers are rational, they would bid a lower amount knowing they would have to pay tax on my auctions. Perhaps what bothers you more is that hobbyists who sell (like me) are often happy to get anything better than wholesale.....because wholesale bids from dealers or unpredictable and often lousy prices at auction are our only easy alternative. For sure I undercut true dealers selling on ebay...but it is not because of the tax. I am generally delighted to sell of stuff I don't want very cheaply.....I just want it gone. Edited by Smallcentguy
05/09/2017 6:50 pm
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Pillar of the Community
Canada
5391 Posts |
The way ebay avoided the issue was that Canadian sellers invoices were issued through An address of ebay International in Switzerland. The service was deemed to have been delivered there! No longer . The CRA and the VAT people in U.K. have been after this issue for years. As Pokerman so elequently stated ......" do the right thing". Edited by Pacificoin
05/09/2017 6:50 pm
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Rest in Peace
United States
2668 Posts |
Geez, that's almost as bad as living in the Peoples Republic of California!  |
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Pillar of the Community
Canada
3049 Posts |
This is good information to know... But I'll in all... I really don't mind nor am I shocked or offended. Government sees a way of collecting revenues they're going to get it. Last month my ebay fees were $17.90. So if I have to pay tax on their service of providing their service so be it. I don't know of any other place where I can still get such a wide audience at such low rates.. I asked a local auctioneer what their rates were and he said 25-33% of the hammer! ebay is way cheaper than that! |
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Valued Member
Canada
135 Posts |
"2) A separate issue: the CRA is actively seeking out sellers who cross the threshold for "hobby" income who do not have a GST number/are not charging sales tax when they should be. This is the commonly quoted "$30,000 in a year" number. It is more complicated than that, with a certain amount of a single or multiple quarters can push a seller into the "should be charging sales tax" area"
I imagine that an additional benefit for the government is that by registering for a GST number, you officially become a business, needing to claim your gross revenue for the year and paying taxes on your net profit (which we should be doing anyhow).
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Valued Member
Canada
457 Posts |
An upside to this is that anyone who registers their hobby as a business will be able to write off all coin purchases as supplies/stock, you will also be able to write off a portion of your home and home expenses. If you keep a log book in your car and track how many Km/month you travel to buy coins, ship coins or research coins you can write off a percentage of your fuel or lease. 50% of meals in restaurants where you document a discussion or coin related meeting. The list goes on and on. As a proper home based these write offs are very common and they usually only make up a small portion of your monthly in and out cash flow. But  ..... as a hobby business I personally think they just gave me a way to get free coins, I don't recall any limitations on how much inventory a store has to move in and out. I probably have sold 5 or 6 grand worth of coins in the last few years, but that is a small portion of the " inventory " I have bought to put on my shelves  I think I will go see my accountant.  I may have to start a small coin shop  |
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Pillar of the Community
Canada
2495 Posts |
I make sure I keep my hobby/business sales below the annual 30K limit (or any consecutive four quarters). I keep track of expenses and file at tax time. It's nice to sleep at night. From what I understand of the new ebay policy and please correct me if I'm wrong: 1. I'll be paying 13% HST tax (ON resident) on my ebay fees and 2. there'll be no change to my 30K limit of sales which require no collection on my behalf of HST. |
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Pillar of the Community
Canada
2366 Posts |
@Smallcentguy Not sure where you're based but one consideration is that if you're in a higher tax province (like Ontario) and regularly selling to lower tax jurisdictions (US, AB, BC etc) at around your original cost (or at a loss) then it actually works out that you get a refund from the good GST/HST folks and the paperwork is pretty minimal; particularly compared to income tax forms. The form is a 1 pager on which you enter maybe half a dozen numbers. The starting point is that they pay you $300 for the trouble of doing the paperwork and then it works out from there based on your actual sales. You don't even need to incorporate or anything to get a GST/HST number. While you are required to have a GST/HST number when your sales are higher than the $30k limit it isn't mandatory that you have at least $30k in sales to get one. Any seller can get one. Just download the tax form, plug in the numbers and see if it works out for you. And if you're dealing in .999+ silver or .995+ gold/platinum then HST doesn't apply of course. Except possibly on the ebay fees. |
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Valued Member
165 Posts |
Question. So say I sell $3,000 CDN/year worth of coins on ebay, do I need to do anything with regards to taxes? |
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Replies: 32 / Views: 8,019 |
Posted 05/09/2017 4:25 pm
