Etsy Collection of HST/GST tax for all Canadian Sellers regardless if required by law or not

[#1]

I am a Canadian based Etsy shop.   I just received an email from Etsy outlining mandatory collection of Canadian GST/HST taxes on all sales made to Canadian customers.   I am currently exempt under Canadian regulations from remitting taxes as my annual sales are below the required sales volume and given I make everything that I sell, I can’t, and don’t wish, to grow sales to that point.  

Normally I would be pleased that Etsy is taking an administrative step off my plate.  However, Etsy’s action is both forcing me to apply for a tax number (when I don’t need one) and becomes another added cost to my Canadian buyers.  It is also stripping away a sales advantage that the “Feds” had given to small entrepreneurs.  Sigh…..

[mountainfeathers]

Bichen there is no minimum sales for pst gst ys 

[dararowlandhandmade]

I don't think it is clear whether Etsy will collect the tax even if we give them our HST number. Messed up. 

[KnoxMountainKnitCo]

@treetreasurescanada I'm in BC as well and trying to figure this all out. It is worded in a way that makes it seem like they will collect and remit PST now, but not G/HST. The part that I'm stuck on is the last line (bold). Since they are getting rid of the existing sales tax tool, it makes it sound like if we are registered for G/HST, we need to add taxes into our prices. 

Starting July 2022, Canadian regulations require Etsy to collect the following sales taxes on physical goods from buyers in Canada:

GST/HST if you haven’t provided your GST/HST ID
QST from buyers in Quebec if you haven’t provided your QST ID
RST from buyers in Manitoba (whether or not you provide your RST ID)
PST from buyers in Saskatchewan and British Columbia (whether or not you provide your PST ID)
If you’re tax-registered, make sure to add your GST/HST and/or QST IDs, so Canadian buyers aren’t charged tax twice. Since you’re obligated to collect and remit these taxes, consider updating your listing prices to include their cost.

[EasyCraftsCanada]

@KnoxMountainKnitCo Oh, you are seeing different information than I am. I'm just going by their email. May I ask where you are seeing that part that you posted? 

[TreeTreasuresCanada]

@KnoxMountainKnitCo I'm also seeing different info.

[KnoxMountainKnitCo]

Sorry, y'all, I can't figure out how to properly tag people. Hopefully you see this anyway.

The last paragraph of their original email says they are getting rid of the existing sales tax tool and "if you are collecting and remitting your own sales tax... use the domestic and global pricing tool to adjust your prices for buyers in Canada."

To me this reads that we need to increase our prices to include taxes now???

The above blurb is found if you go in to edit your Legal Shop Information under Legal and Tax Information.

[CallystoDesigns]

Question, that's going to be hard to do since it varies from province to province but lets say an item is 20, I bring it to $22.60 with 13%...now Etsy is taking 6.5 and 3% of that 22.60 and not 20, so I'm paying out of pocket to cover the taxes? I'm soooo confused

[KalxDesigns]

@cindylouwho2  Can you help me understand this?  I currently charge HST on Etsy.  Etsy send the funds to me and I remit them to CRA every quarter, with adjustment for input tax credits.  Is this going to change?  Will Etsy continue to send the funds to me, or are they going to remit the funds directly to the CRA?  Their email is not at all clear on this.

[cindylouwho2]

@KalxDesigns they almost always fail at clarity LOL

I assume that it will continue to work that way for us, since they mention buyers getting charged twice if Etsy doesn't have our GST numbers. We'll have to wait and see, though. 

[KalxDesigns]

Thanks.  It will be an accounting nightmare if they remit the funds directly to CRA. 

[TreeTreasuresCanada]

Just guessing but it could be a problem of Etsy not knowing how to write the code.  It should be that all Canadian purchasers are charged the appropriate GST/HST.  For those sellers who are registered, the funds should go into their payment account.  Non-registered seller tax should go to the CRA.  It sounds as though Etsy plans to code so that all Canadian purchasers, except those purchasing from GST/HST registered shops, will be charged GST/HST by Etsy.

[cindylouwho2]

@TreeTreasuresCanada  yes, and if they can code to collect, they can easily collect for all & then remit the money to those of us registered. They already give us back the taxes we charge while keeping the taxes they charge (such as for my US & EU buyers) - why not continue?

Sounds like they just want to download the work on to sellers. 

[NCLPhotographyGifts]

That is my take on it also. On the "Legal & Tax Info" page, the 1st button under Canadian Taxpayer IDs says clearly that Etsy will collect GST/HST if you you DO NOT provide your tax ID.

I don't collect taxes since I am below the $30,000 threshold, but it evens out the field if Etsy does it as required by the new law.

[CallystoDesigns]

How did you enter your number? I went in to add tax ID which is the number the government gave me and its saying incorrect? which number is it, is it a short one with letters or the longer one? ty

[TreeTreasuresCanada]

@CallystoDesigns   It is input with no spaces.  9 numbers followed by the RT0002 (or whatever your number is).

[mountainfeathers]

Has any one else had trouble entering your tax numbers 

im hopping items coming into canada will also be charged equalising the playing field

[TreeTreasuresCanada]

@cindylouwho2  I have also opened a support ticket.  So far just an acknowledgement that the ticket has been received.  Will let everyone know if I receive any clear information.

Oops, didn't mean to nest.   Oh well, this thread is all over the place anyway.

[DragonFireGlass]

From what I have read:

If you have a GST HST PST QST number - The tax will be included in your prices, you need to adjust your prices to reflect that. 

If you do not have the number, Etsy will collect those taxes and they will submit them. 

Here is the link

https://community.etsy.com/t5/Announcements/3-Important-Tax-Updates-for-Sellers-in-Canada/td-p/13863...

[cindylouwho2]

@DragonFireGlass  "The tax will be included in your prices, you need to adjust your prices to reflect that." The link you posted does not say that part. Only some people got that message via email; I did not. I am in Alberta so no PST to worry about. 

It makes no sense for Etsy to calculate GST/HST for most of the site but not for those of us who are registered. It also makes no sense for them to send that message to some folks, while only telling the rest of us to make sure we have our registration numbers up to date. 

For Etsy, it makes perfect sense to not be clear, and to have Support provide confusing messages, though
; - )

[DragonFireGlass]

@cindylouwho2 

You can't find that info because Etsy changed the wording. I printed it out before and it said

 "If you’re tax-registered, make sure to add your GST/HST and/or QST IDs, so Canadian buyers aren’t charged tax twice. Since you’re obligated to collect and remit these taxes, consider updating your listing prices to include their cost."

So, most likely something changed and they changed the wording

[DragonFireGlass]

@cindylouwho2 

Also, when you are not registered, Etsy charges and submits those taxes in Etsy's name and not the sellers name.

They also don't do expenses, just one fat tax check

[cindylouwho2]

@DragonFireGlass  the Google cache of the page from yesterday does not have that wording either, and my email from Etsy definitely does not. I've tweeted the screenshot. 

So yeah, they realized they made an error and have deleted that evidence already, but some of us never got that info in the first place (and the email went out before the Announcement existed - I checked as soon as I received the email). That indicates that it was never meant for all of us; it may still be true for some of us. 

"Etsy charges and submits those taxes in Etsy's name and not the sellers name." - yeah, we understand that already. The question is people who are registered, and the upcoming loss of the tax tool. 

[KnoxMountainKnitCo]

@cindylouwho2 what does your email say? It's so weird that they would send different emails. The blurb about updating your prices is down at the very bottom of my email, where it talks about getting rid of the sales tax tool. It's basically the last line of the email for me.

[KnoxMountainKnitCo]

I just checked and the Legal and Tax Information blurb still says this:

Canadian Taxpayer IDs

Starting July 2022, Canadian regulations require Etsy to collect the following sales taxes on physical goods from buyers in Canada:

• GST/HST if you haven’t provided your GST/HST ID
• QST from buyers in Quebec if you haven’t provided your QST ID
• RST from buyers in Manitoba (whether or not you provide your RST ID)
• PST from buyers in Saskatchewan and British Columbia (whether or not you provide your PST ID)

If you’re tax-registered, make sure to add your GST/HST and/or QST IDs, so Canadian buyers aren’t charged tax twice. Since you’re obligated to collect and remit these taxes, consider updating your listing prices to include their cost.

Note: If you sell over $30,000 CAD per year, you’re required under federal law to become GST/HST-registered. You may also need to register separately for certain provincial taxes if you sell to buyers there.

[cindylouwho2]

@KnoxMountainKnitCo  yep, looked there, don't have it. I posted a screenshot on Twitter, but can't link to that here. 

Could you link to what you are quoting? I checked the Help pages yesterday and couldn't find anything, but they could be doing these things on different days. You'd also think they'd link to that in the announcement if true for everyone, instead of removing it from the announcement as they have done. 

Etsy is very consistent about contradicting itself LOL