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…..

[ArgusCollection]

Does anyone know where to find the Canadian Sales tax figure collected and remitted by Etsy? All of the csv reports available show only zeroes in the Sales Tax column. 

[DavidandRau]

What etsy is doing is actually completely illegal according to canadian tax law.

[cindylouwho2]

@DavidandRau which part? Everything was legal last time we all checked it out with the CRA & the digital economy dept. 

[TreeTreasuresCanada]

@ArgusCollection  I checked your shop and Etsy does NOT collect GST/HST for your shop.  This means that you provided Etsy with your tax number and that, since July 2022, you had to include the tax in your prices and remit the applicable tax to the CRA.

[ArgusCollection]

Thanks but Etsy does collection PST for several provinces such as British Columbia and Saskatchewan. It doesn't collect anything for HST provinces such as Ontario. Etsy says it collects and remits that PST. Last year, when I downloaded the appropriate csv file the tax Etsy collected (including what was collection for US buyers) was listed under the Sales Tax column. That column is now all zeroes for all buyer locales. 

[TreeTreasuresCanada]

You said; "Does anyone know where to find the Canadian Sales tax figure collected .."  so I assumed you were referring to federal taxes.   Etsy does collect and remit provincial taxes where applicable.  I don't use the CSV files so don't know what you see but Etsy collects and remits so no action is required on your part with respect to PST.    If you do need the provincial sales tax figures, you would need to go to the individual orders and add up the figures.

[ArgusCollection]

Also I can see the PST that Etsy charged buyers from, say British Columbia, and if you mouse over it Etsy says it is collecting PST and remitting it on my behalf. I do have a total figure of all sales tax collected by Etsy but it is worldwide, so US, Canada, VAT etc. I need to break it down by country -- I did that last year with the csv files but, as I mentioned, the sales tax column is now all zeroes. 

[TreeTreasuresCanada]

I'm confused.  Why do you need a total figure of Canadian provincial sales taxes collected by Etsy?

[InspireInMotion]

@ArgusCollection   Example of a transaction to BC. I live in ontario.  If you are register for HST for a 10.00. On the invoice you will see 10.00 plus .50 for BC taxes. Etsy will remit that .50 on your behalf. You obligation is the HST on the $10.00. So when filing your HST. You HST will be 10.00 times .05 dividend by 1.05. or $.0.47.  So you have to remit to the government $0.47.

Now if your not register for the government. Your order will will $10.00 Plus .50 for PSt and 50 for HST. Because your not registered with the government, Etsy will remit the .50 for the hst and .50 for the PST on your behalf. 

You will never see that pst on the Csv report because your not responsible for it. Etsy is collecting it for us and remitting it to the appropriate provincial governments.

[ArgusCollection]

Right, got that. I am registered for GST and I have nearly 500 orders a month so pulling out the PST for every single order is a huge task. Last year the PST collected was indicated under the Sales Tax column on the Orders CSV - I printed them all out and the sales tax was shown. This year the sales tax column shows zeroes. 

[TreeTreasuresCanada]

@ArgusCollection   As before, I am confused.  You do not need to deal with PST.  Etsy collects and remits the PST.  You only need to concern yourself with GST/HST.  You need to calculate the GST or HST part of all Canadian orders.  Add up the GST/HST and remit to the CRA.  Remember to reduce your total sales amount by the amount of GST/HST which was included in your prices.

[cindylouwho2]

@ArgusCollection also very curious why you are trying to separate out the PST Etsy collects & remits? They removed it from the csv because it has nothing to do with us. I must admit I find doing my Etsy financials much easier now that I don't even have to look at that column...

[TickleYourWitch]

Even if you have to file a PST return (I do in BC), they are only interested in your gross Canadian sales total, not anything to do with PST. You only have to report purchases on which YOU did not pay PST, but should have. ETA...as well as any sales where you collected PST via other venues, of course, but not Etsy. 

[ArgusCollection]

@treetreasurescanada @cindylouwho2 I have been pulling out PST, RST and QST from the non HST provinces as recommended by my accountant. But I gather they aren't an ITC so not sure why. Anyway I won't bother any more since they aren't part of my annual GST return. Thanks all for wading in!

[TreeTreasuresCanada]

@ArgusCollection  Also don't know why your accountant would ask for those figures.  Speaking of ITCs, do you calculate and use the HST charged on your Etsy fees as ITCs?  With your volume of business, it would add up to a substantial amount.

[ArgusCollection]

@treetreasurescanada Yes I do claim the HST on Etsy fees. The csv file shows the amount every month Tax on Sellers Fees so that is one thing that Etsy makes easy! A rare thing. 

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