Canada Sales Tax Adjustment Starting July 1 2022

[Ecoseedbank]

Hi guys, first time making a post, I am hoping I can get some answers here, I know a few of you already contacted Etsy about this. 

So long story short, I saw the announcement that Etsy would start remitting sales taxes directly to the CRA for Canadian sellers. I thought yes that is fine, less trouble to manage. And Ebay and Amazon did the same due to the new law to took effect July 1st. I knew everything was in order and thought we were ok as all taxes registration numbers are in order.

So this morning, I spit out my coffee when I saw that. What is happening?? Etsy is no longer charging sales tax on all orders? This represents a few hundred $ that we lost in the past 10 days. Trying to read all the forums and articles, there seem to be a lot of bugs, like taxes being taxed etc. I just doubled-check our Ebay account and the receipts are the same as before, but they keep the sales tax to directly remit to the CRA. So everything is fine there. So what is going on with Etsy????

If I understand well, we have to change all prices on our products to include a 15% tax, but what about buyers in Alberta where it is only 5%? I think that is unfair to the buyers. Also, we sell on multiple platforms and on our website, so now Etsy will be the only platform with different prices??? And also new sellers that have below 30K$ in sales will have a competitive advantage because the tax is usually ''hidden.'' Also it is illegal to provide a receipt without the taxes shown on it? Should we make separate receipts to mention that we fulfill our tax duty to be legal???

This is quite annoying and confusing. Etsy messed up Canadian sellers badly with their USA-biased ''star seller'' system. Now, this seems like botched coding, what is going on? I am pretty sure not all Canadian sellers have increased prices as IT HURTS SALES! Does anyone have any idea of what to do about this?? thank you

[WhitetailRoad]

There is a lengthy thread going about this in "All Things Finance". This tax situation for registered sellers is a nightmare - to put it lightly.

Since we are now having to roll the GST/HST into our item prices, lots of my Canadian orders are being taxed on top of tax. Which is illegal.

Many have contacted the CRA and I was told that they have been closely monitoring the thread that we have going here on the etsy forums. At this point, we can only hope that they step in.

[cindylouwho2]

This is the main thread for facts and strategizing: https://community.etsy.com/t5/All-Things-Finance/Canadian-Sellers-who-are-Registered-to-Collect-GST-...  I also have a blog post with the facts, &  a Tumblr post with tips for sellers but can't link my own stuff here. Both will be updated today. 

You have to increase your prices or eat the tax remittance cost. Yes, Etsy is the only platform doing this to small businesses; every other one is either collecting the tax for sellers or allowing them to calculate it correctly on each order. It's mind-boggling how far Etsy will go to make a few extra bucks by not programming the site properly. 

[Ecoseedbank]

thanks for your reply I will look that up

[Ecoseedbank]

All right I believe I have read everything there is to know about this situation. Still, this is quite unacceptable, and just like with the ''star-seller'' system, we should massively write to Etsy to have this changed. Anyway, they shot themselves in the foot, because if we sell less because of higher prices, they will make less money. These are 2 MAJOR issues we've had in the past few months. What is next?

[TreeTreasuresCanada]

@Ecoseedbank  Many of us have written to Etsy numerous times but the problems seem to fall on deaf ears and Etsy denies that there are any problems.  In addition to all the disadvantages with including the GST/HST in prices, Etsy is incorrectly charging tax on tax and incorrectly charging PST to British Columbians on orders from outside the country.  Please do contact Etsy.  Hopefully they will eventually listen to their sellers.

[KozeDecor]

Even I am facing these issues, from July 1st they have put my shop on holiday mode as soon as I put my tax details.. Its soo annoying and frustrating, their support team isn't replying to any of the emails just the automated reply and unfortunately I don't have an option of chat or call. 

Don't know whats wrong with Etsy, they increased their fees saying we want to make the platform better instead I feel the platform is getting worse rather any better. Its been more than 10 days and I am stuck with their automated emails with no hope of any reply

[cindylouwho2]

@KozeDecor Unfortunately there is only one team that reviews tax and ID info, and they are very backlogged. I recently heard of someone waiting 15 days for them to get back to him. Call or chat does not help.

Make sure you only have one ticket open, and stick with it. It really sucks. 

[KozeDecor]

@cindylouwho2 : Thanks! 

I understand, but they close my ticket saying my request is complete only with their automated reply

[cindylouwho2]

@KozeDecor  They will usually close additional ones if you already have one open. Check to see if you have any open here: https://help.etsy.com/hc/en-gb/requests?segment=selling and if not, you will need to start a new one. 

Make sure you read the initial email reply from Support, as sometimes they require you to reply again before you get in the queue. 

[FabricDesigTreasures]

Yes, this equivalent to Etsy pulling a leg off a table with four legs.  I sell on Etsy as well as on my own website.  I have stopped selling to Canadian buyers on Etsy.  If I continued to sell on Etsy, I know my books would be a mess when it comes time to doing taxes.

[MetalsHeart]

I had to shut my shop down until I figure out what to do.  My items are priced low and I already have a lot of competition from the US.  If my item is $15.00 and a US Shop is $13.00.  Who's item do you think a customer will buy?  I almost feel that Etsy is trying to week out everyone outside of the US.  My full-time income is now $0.00.  I am so down right now, I am not sure what to do.

[cindylouwho2]

@MetalsHeart you can use the domestic pricing tool to change prices for Canadians only. 

"My full-time income is now $0.00. " - oh no! Never ever rely on Etsy for all of your business income. They can close you down, deindex you for weeks by accident etc. Start selling somewhere else today. 

[Ecoseedbank]

I feel you MetalHearts, please make sure to write to Etsy. If we all complain it could maybe change something like with the ''star-seller'' system. It makes me sad to read that other sellers have stopped selling to Canadian buyers and many have had sales go down...Nowhere in Canada the tax is included in the price, this isn't Europe. What a shame. Amazon prohibits sellers from selling more expensive on other platforms and ETSY asks us to do just that. UNBELIEVABLE, THIS HAS TO BE A BUG AND/OR LAZY MANAGEMENT.

[BetterAtFeeling]

Etsy is also charging tax on non taxable items, such as pure cacao. This makes my products way more expensive for buyers for NO REASON. I tried talking to an Etsy staff person but he insisted that they were correct in charging tax on this. There is no grocery store in the country that charges tax on pure cacao. Super frustrating. I might just try selling elsewhere instead. Boo, Etsy!

[EcosDIY]

My thoughts exactly! Any progress here? It’s not great, just now got my HST number and learning of all the problems I face here

[EcosDIY]

I have also noticed that my sales and traffic to my shop has drastically reduced since registering my tax number for HST also, how can this be??  

[TreeTreasuresCanada]

Registering for HST would have no effect on your sales.  Did you make any changes, raise your prices, etc?

[EcosDIY]

I did but then I brought them back down again realizing that it was only my Canadian buyers that should be taxed. It’s so confusing, even the person who does my taxes is confused and not getting back to me because they don’t know how I should handle things

[TreeTreasuresCanada]

@EcosDIY   If you so choose, you can set different prices for Canadians.  This is found on each listing under "Inventory and pricing", "Domestic and global pricing"

There is no fair and equitable way to handle the GST/HST included problem.  Choose what you feel works best for you and your customers.

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