The Taxman Cometh

Discussion in 'SAMPLE Talk' started by YaniDee, Jul 27, 2018.

  1. Exactly. And it should be the same vice-versa. In all the years I have bought things online, or had shipped from somewhere outside Canada, I have never been charged Canadian sales tax. Coming over the border with goods, that's a different mentioned by @heisenberg (btw- love the handle! Reference to Walter White by any chance?). This may also apply to physical goods sent to your destination from outside Canada, in which case you would pay duty or the bogus UPS "brokerage fee" which is criminal in itself. I bought three VI's in the last month (downloads), one from US, two from Europe...neither charged me any tax whatsoever.
  2. Hasici

    Hasici New Member

    Apr 4, 2019
    You completely misread how tax works in Canada. Just because you had not been charged tax doesn't mean there isn't tax. The tax for Canada is clear: import under $20 no tax, under $60 if it is gift no tax. Everything else is subject to tax.

    If you had not been charged tax (the international seller is not required to collect tax ON YOUR BEHALF if he doesn't have physical presence in the country) then cra expect you to voluntary pay the tax. (They have no other way currently of knowing you purchased something nontangible online only by voluntary disclosure) but they know if it was shipped
    So saying, I ordered zillion things and never paid tax doesn't mean it was tax free. It wasn't, you just didn't pay tax and got away with it. I would also not use that as an argument when you argue with CRA because they will be like "Really?"

    Things are changing as government put pressure on big fulfillment processors to automatically include tax because nobody is volunteering to pay tax if it wasn't added by the sellers. As a seller if you use any of the big payment processors they will add tax and submit it to proper tax authority. The good thing for the seller is that these things are done automatically - they don't have to 3worry about anything. The bad thing for buyers - the tax will be included more and more, even on small things.

    There are many "too small fish to fry" for CRA. For example selling on ebay or kijiji etc...cra will go after sellers that look like it may be a business because you should report any gain from selling as an income.

    As mentioned the only way to avoid legally taxes is to go to US for a day/two, order something from different state and from company that doesn't have presence in the state you are in and then bring it back to canada within the stated limits. No tax. But you spent $hitload on travel.
    Last edited: Apr 14, 2019
    jacobthestupendous likes this.
  3. VinRice

    VinRice ... i am a robot ...

    May 20, 2017
    The UK of Englandshire
    Most countries, states, provinces and trading blocs (EU) have had 'electronic transfer' tax regimes for some time now but haven't enforced them because of the obvious costs of administration. That is going to change rapidly over the next few years. Get used to it. At some point some company will be fined or legally barred from selling in a particular region for non-compliance, just to push the message home.
    jacobthestupendous likes this.
  4. I claim ALL of my online business purchases on my annual returns (studio hardware, virtual instruments, etc); CRA sees all of my receipts, which do not show any taxes from International purchases....has never been an issue.

    From what CRA tells me, a company needs to have a physical presence in Canada in order to collect sales tax. This would exclude a company like Native Instruments. Another good example is Netflix, there is no tax when you pay for your subscription. Why? They do not have a physical presence here. Apple, on the other hand, does have a physical presence, so you'll pay GST. I'm sure the government will eventually catch up to his and start enforcing at some point, but right now that's next to impossible.
    Last edited: Apr 15, 2019
  5. dgburns

    dgburns splunge

    Nov 4, 2012
    They advertise locally, therefore have a presence, therefore required to collect taxes.

    And again, if you run a business, it's just a flow through item right?

    Two accounting options-

    Quick method of accounting- for sales of between 30k to 400k a year. (this can give you a little break on what you need to remit based on what you collected, but you can't deduct your ITC's or input tax credits)

    Full accounting method- where you remit HST exactly as what you collected, minus what you paid out. So if you use this method, you deduct the eligible taxes you paid out on business expenses and supplies from what you charged your clients. Hopefully you can see that HST is therefore a flow through item ?

    I believe operating a business with sales of under 30k (based on CRA income criteria) you are not required to collect and remit HST, but can do so voluntarily.
  6. Lee Blaske

    Lee Blaske Senior Member

    More and more online retailers in the U.S. are adding state/local sales taxes to purchases here. It was bound to happen, because online sales were getting an unfair tax advantage compared to brick and mortar businesses. I've always kept track of my out-of-state purchases and sent in use tax to my state for them, so having the retailer take care of it is actually saving me time.
    dgburns likes this.
  7. From CRA....

    "If your business has a physical presence, or “nexus”, in a province, you must collect applicable sales taxes from online customers in that province. If you do not have a physical presence, you generally do not have to collect sales tax for online sales."

    I guess the catch word here is "generally" lol. It would be impossible to track and enforce tax collection otherwise. Good luck collecting the millions potentially owed by Canadian Netflix customers.
    dgburns likes this.
  8. EgM

    EgM Game music!

    Nov 8, 2015
    NB, Canada
    No traces of a GST number on that invoice. I am pretty sure they are keeping the GST they charged ;)

    That said, I always deduct it from my collected GST so meh. Still curious if they remit it to CRA though.

    Attached Files:

  9. Why did they charge HST?? The gst is included in the tax...that’s the hst anount. You should start using an Alberta address ;) We don’t have provincial sales tax.
    Last edited: Apr 15, 2019
  10. EgM

    EgM Game music!

    Nov 8, 2015
    NB, Canada
    I'm in NB, we have Harmonized Sales Tax here (GST+PST).
    Wolfie2112 likes this.

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