eBay Canada Will Collect Marketplace Sales Tax July 1st
Canadian sellers received an email today informing them that eBay will begin to collect and remit applicable sales taxes to appropriate authorities on behalf of buyers and sellers.
Pursuant to the guidelines announced in Canada's 2021 Federal Budget and recent provincial sales tax amendments, eBay Canada Limited ("eBay") will be required to collect Canadian sales taxes (GST/HST/QST/PST) on applicable sales to Canada-based buyers.
Effective July 1, 2022, for all sales of tangible goods sold within Canada, eBay will be collecting the Canadian sales taxes (GST/HST/QST/PST) from Canada-based buyers on behalf of Canada-based sellers (irrespective of registration status) and remitting the tax to the appropriate tax authorities.
For sellers not registered to collect tax with the CRS and provinces, there is no action necessary. You will begin to see sales tax charges and collected by eBay on buyer purchases beginning in July. eBay collected taxes will also be displayed in your seller reporting as of that date.
For GST/HST and/or QST registered sellers, eBay will be appoint as a billing agent for collection and remittance of Canadian sales taxes where the sales tax laws do not automatically require it. As such, eBay will require completion of billing agent authorization forms. A separate communication for GST/HST and/or QST registered sellers will be forthcoming...
...eBay will also be responsible for collection of the Canadian sales taxes on supplies to Canada-based buyers of digitally downloaded goods, including sales from non-Canadian sellers.
A dedicated post was created in the eBay Canada community for seller questions.
We know you might have questions regarding the email you recently received about eBay Canada collecting Canada Sales Tax (GST/HST/QST/ PST) on behalf of our sellers.
Please feel free to leave your questions and comments here and we’ll get them answered as soon as possible. Keep in mind there could be a delay as we check with internal teams to ensure we’re getting you the right answers to your questions.
There are several questions, and I'll update here as they receive answers, but it's clear that increased fees due to having sales tax include in the total for fee calculation is top of mind for many sellers.
I realize that the buyer is paying for the GST/HST/PST/QST however will this amount get added to the total sale upon which the seller pays eBay a commission fee? I ask because when a US buyer purchases from me (I'm a Canadian seller) eBay adds state taxes to the sale and then forwards the taxes to the appropriate authority, however I'm still required to pay a commission on the tax which is added to and then removed (almost immediately) from the sale.
I'm wondering the same thing, and won't be surprised in any way whatsoever if eBay starts applying the fee structure to this additional amount. They already seem to have difficulty understanding that an item that sells for ten bucks is worth ten bucks whether I'm mailing it to Canada for $3 or the U.S. for $6. They'll probably apply the fees to the taxes, at which point sellers will have no choice but to pass it on to buyers, then the buyers will get annoyed and leave lower DSRs or negative/neutral feedback as a result. Just wait for it.
If you're a Canadian seller, I'd love to hear your thoughts on this - questions, concerns, love it, hate it? Let us know in the comments below!
