UK Buyer not Charged VAT, but I was still charged VAT Processing Fees...

[PapillionEra]

There seems to have been a glitch with VAT not being charged on one of my orders. I frequently sell to the UK, and I've never had this happen before. Normally, the order has a note about VAT being paid, Etsy's VAT number, item value listed in Pounds Sterling, and a notification to make sure to mark the package with VAT paid, etc.  

Her purchase was only $57 CAD, so she should have been automatically charged. Oddly, I WAS charged the VAT processing fees as below:

VAT transaction-CA$0.31

VAT processing fee-CA$0.33

VAT Regulatory Operating fee-CA$0.09

VAT delivery transaction-CA$0.17

I'm going to speak to the buyer and cancel the order so she can re-order because this is obviously an error, especially since I'm being charged VAT transaction fees when no VAT was collected by Etsy. 

[BootifulLabels]

You were charged VAT on the fees for the sale, nothing to do with what the buyer paid.

The fees you pay Etsy for their services are subject to VAT just like any other purchase you make.

No need to cancel the sale.  Whether or not Etsy charged the buyer VAT (and if they didn't that is entirely their responsibilty and their problem) they still have to add VAT to all the services you pay for (their fees for selling etc).

[PapillionEra]

I think you're incorrect. I'm in Canada, I don't pay VAT. The UK buyer pays the VAT. As a seller, Etsy charges me fees for the processing of the transaction, including for collecting VAT on the sale. But, I shouldn't be charged for VAT collection and processing fees when Etsy didn't collect the VAT from the buyer.

I did cancel the sale, and the buyer acknowledged she thought it was odd they didn't charge her VAT when they should have. Anyway, she's repurchased, and VAT was charged this time.

[BootifulLabels]

@PapillionEra 

It may depend on where you are located.  I gather you are in Canada where they have an equivalent to UK VAT, I believe it is called HST?  Here in Australia we have GST (goods and services tax).  In most countries that have these taxes, it is applied to both goods purchased, and services provided.  We pay Etsy fees for the services they provide us, and in UK and AU those fees are subject to VAT/GST.  We are buying these services from Etsy and the government wants their cut.  For every fee Etsy charges me, my government gets it's 10%.  I am not 100% sure it works the same in Canada, but I would be surprised if it doesn't.