Canadian Taxes Aren't being charged on orders.

[8thLineCreations]

I just finished a phone call with Etsy support and I was told that because I have tax numbers for all provinces in Canada that I am responsible for remitting the taxes. Which is true.

Unfortunately the support person didn't seem very aware of the changes or how they worked.

The part that doesn't seem right is if you have tax numbers they do not add tax to the order. The support person said we are responsible for collecting the tax from the customer.

I said you want us to go back to the customer to collect the tax after the sale has been completed and she said yes. 

There is NO other platform or store I know of that would go back to a customer after the fact to collect tax.

This would also make it a huge amount of work to balance tax accounts at the end of each month.

Is this true? IS this the way it is actually suppose to work?

Why are taxes not calculated as it was pre July 1st and if you have tax numbers  send the tax to the seller to remit and if no tax numbers then Etsy would remit.

[TreeTreasuresCanada]

Sellers registered to collect GST/HST must now increase their prices to include the tax or pay the tax from their profit margin.  There are several threads about this issue.

https://community.etsy.com/t5/All-Things-Finance/Canadian-Sellers-who-are-Registered-to-Collect-GST-...

[ShopBellaClayDesigns]

Be mindful of different laws respecting PST in different provinces. Small sellers are  not allowed to charge sales tax or GST to their customers - I strongly recommend people seek either legal advice or advice from an account rather than relying on an Etsy forum that very well could give misinformation. Etsy is responsible for paying their own marketplace fees to the Canadian government as part of the digital economy and peer to peer selling. Laws vary by province, company status and how each person is individually owned and operated. Sole proprietors, for example, have more control but less advantages when it comes to benefits of reducing costs. As a small seller, we pay the taxes on our supplies, we do not charge our customers taxes. Those are the laws of Canada. Again, I encourage everyone to seek advice from those that are educated and knowledgeable in Canadian taxes and online selling. Misinformation will get you into trouble. 

[8thLineCreations]

That's insane, so every product we sell world wide has to be increased in price, to take into account multiple Canadian tax rates?

Why on earth doesn't  Etsy just have tax lines like every other platform or store?

We won't have any breakdown on taxes for an order which is processed though Etsy. That is not going to make Revenue Canada very happy..

[craftisland8888]

I am running the same issue. Strange thing is that I currently 3 orders from Canada. 

1 from QC, they didn't charge tax at all

1 from BC, they did charge PST on their end

1 from NS, they didn't charge tax at all

My  nephew also sells on ETSY, he said that ETSY charged tax for his QC customer's order

There seems to be a very chaotic system! Some provinces charge up to 15% tax, does that mean we have to dig 15% of the sales out of our own pocket now?

[cindylouwho2]

@craftisland8888 yes, if you are GST-registered, you need to incorporate that tax into your item prices & shipping prices. 

Are you registered for Qc PST? If not, Etsy should have charged that. Note that there are tons of bugs right now, though. 

[craftisland8888]

Thank you for the reply. Yes I'm GST registered. I have noticed many errors so far. 

For eg, I just had another NS sale today. so far 2 customers from Nova Scotia after July 1st. ETSY charged tax on one customer but not the other.  How did that happen? I have contacted their live help today, she didn't seem to know what to do so she told me she forwarded my concern to the team. 

[LemonsLoot]

I currently have sold five sales since july 1st. One was Canadian (BC), the rest were USA. Each one was charged tax..... I'm so confused.

[MuckyMuttsShop]

BC would have been charged PST but not GST. You'll been to remit that on your own from your current Etsy profits. 

[ShopZahura]

I don’t want Etsy charging taxes to my customers. I didn’t put any tax ID because I don’t want my items taxed and yet they still tax them. So where is that tax money going. Because I don’t have any gst stuff or an ID for taxation. So is Etsy keeping the tax money or the government just like collecting free money?

[CraftyCornishMaids]

@ShopZahura 

if you do NOT put your GST/HST number into etsy,

Etsy has to collect GST/HST from the customer, and provide those taxes, to the canadian government, against THEIR GST number.

If you have a GST/HST number, then you have to provide it it Etsy,

Etsy will then NOT collect the GST/HST from the customer, but you will have to include it in the price, and remit it to your government under YOUR GST/HST number.

The customer has to pay the tax, it's just whether they pay it to you, or Etsy

[LemonsLoot]

@muckymuttsshop

I understand that.. but why are US customers being charged tax?

[TreeTreasuresCanada]

For sellers registered to collect GST/HST you need to include the tax in your prices or pay tax from your profit margin.  Etsy now collects and remits provincial sales taxes for all provinces with provincial tax.  Quebec is an exception if you have your QST number reported on Etsy.

https://community.etsy.com/t5/Announcements/Updated-6-27-3-Important-Tax-Updates-for-Sellers-in-Cana...

[JUstenboisShop]

Apparently before July 1st there was a table under Shop Manager > Finances > Payment Settings > Sales Tax that needed to be completed to get Etsy to charge the necessary taxes to Canadian Customers. That is now gone. It is my hope that they charge the right amounts to the right provinces and actually break it out between, GST, HST and PST. Yet to make a sale in Canada since July 1, so we will have to see.

[EPICut]

@JUstenboisShop We had that table filled out and taxes were being charged perfectly until July 1st. They deleted the table July 1st and now taxes are no longer being collected on Canadian orders for us. The orders just say Tax: $0.00

[EPICut]

We're a nearby shop (I believe I've heard your shop name spoken around town!) and we're dealing with the same issue. We've been in contact with Etsy, we're trying to reach the CRA and we've even sent an email to our MP to see what can be done about this. It's ludicrous that they've tried to put this on us, not realizing that it's not even legal to collect taxes this way. Hoping that this insane policy gets rolled back soon.

[TreeTreasuresCanada]

@EPICut   It is legal to have GST/HST included in your price.  That doesn't mean that it's a good way to do it.  It's a mess and there are multiple problems with the Etsy implementation.

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-col...

[EPICut]

@TreeTreasuresCanada Thank you for the link! That also lists "You have to show the GST/HST rate that applies to the supply." Does this mean I need to list out every province's HST rate on our message to buyer, that will say HST is now included in the price? This also means that QST/PST would be charged on the tax included price, meaning buyers in Quebec etc. are being taxed on a tax...

[TreeTreasuresCanada]

@EPICut  The implementation and coding is a mess.  Etsy is charging PST on GST which is illegal.

Etsy does have a rather nonsensical blurb which supposedly covers the tax issue. Purchasers only see it when they add an item to their shopping cart and it is a tiny link.

For now, I'm taking a wait and see attitude but I'm fortunate as I'm a very seasonal seller so won't receive a lot of orders until fall.

More info here;

https://community.etsy.com/t5/All-Things-Finance/Canadian-Sellers-who-are-Registered-to-Collect-GST-...

[GlassFusingDecals]

Exactly!! As Canadian businesses we are responsible for collecting and remitting our Canadian taxes, and if Etsy will no long allow us to do so as before, then what? We can't pay that out of pocket, and raising prices across the board doesn't make sense either as then even international customers will be getting screwed over.  The previous system was fine, and this new setup is likely illegal and criminal.  Not to mention the tax double-dipping that is going on for my international  customers who not only pay tax to Etsy now, but also often have to pay customs when their package arrives (mostly US customers right now).  I want control of my taxes back! Especially because there is no record from Etsy of any Canadian taxes being collected or remitted.  Would love to hear what you find out from the CRA. Not looking forward to tax time next year.

Also, not being able to exclude countries (like Germany) from my shipping profiles is another nightmare that would take only a few lines of code for them to fix. US vendors seem to be able to, so why are they screwing over Canadian businesses??

[cindylouwho2]

@GlassFusingDecals You can use the domestic pricing tool to change prices for Canada only, but it doesn't work on the app, with pricing variations, with digital items, or on listings with over 400 variations: https://community.etsy.com/t5/Announcements/Updated-7-18-Domestic-amp-global-pricing-is-here/m-p/135...

"this new setup is likely illegal and criminal" - elements of the setup itself may or may not be legal - although that hasn't been litigated yet, of course! - but the execution has had some unlawful elements, which Etsy appears to be working on fixing. What part of the Criminal Code of Canada do you see being violated? 

The only sellers that can eliminate countries from their shipping profiles are those using calculating shipping, which is available to Canadians. You can never eliminate your own country, though, so that isn't relevant to this topic. 

This is an old thread that was never really updated; there is a lot more recent info here: https://community.etsy.com/t5/All-Things-Finance/Canadian-Sellers-who-are-Registered-to-Collect-GST-... and on my blog (which I can't link to here)

[ShopZahura]

It’s not legal to collect taxes period. It’s actually not a law but a policy.

[CraftyCornishMaids]

@ShopZahura 

of course it's legal to collect taxes

The platforms collect it, for those who are not registered to collect, it is a legal requirement

for those that are registered, etsy has the choice of collecting it on behalf of the seller, or the seller having to include it in their pricing, etsy chooses the latter, they are both legal.

regarding law vs policies, not sure if selling smoking items is illegal without a licence and without age verification, in your country, but it is against etsy's policies

[CraftyCornishMaids]

@EPICut 

If you have a gst/hst tax number, and put it in etsy,

you have to include taxes in your price,

and etsy puts the required -" tax included - where applicable" - so the customer knows it's not broken out.

it's legal - from canada gov website
You must let your customers know if the GST/HST is being applied to their purchases. You can use cash register receipts, invoices, contracts, or post signs at your place of business to inform your customers whether the GST/HST is included in the price, or added separately. 

....

it's rubbish, but that's the way etsy does it ... we've been waiting 6 years so far, for it to be rolled back - don't hold your breath

[TwinklingLullaby]

I wonder if we can delete our GST number on Etsy, so we can let Etsy charge and remit GST/HST for us?  Anybody tried?

I am so confused here.  Thanks!