Personal Finance

CRA going after paypal business holders

  • Last Updated:
  • Nov 17th, 2017 9:26 pm
Newbie
Nov 13, 2017
10 posts
1 upvote
The federal government (CBSA, CRA, competition bureau and privacy office specifically) have immeasurably harmed small business in Canada over the past 5 years and you should call your MP.

-The CRA conducts draconian data sweeps for Canadians using PayPal, but in conjunction with the CBSA fails to collect import duty, GST, HST, PST, and Customs Brokerage Fees from international sellers who don't pay a cent of taxes in Canada. In the case of China, Canadian businesses actually subsidize the shipping costs of their competition through Canada Post.
-Walmart was allowed to roll out free shipping in Canada by their other businesses in order to gain market share at the expense of Canadian retailers. Now that Walmart has knocked the competition out of the market, they are charging full price for shipping.
-The privacy office requires opt-in e-mail lists for retailers with extensive compliance requirements. Foreign vendors don't have to worry about complying with these laws so they can create mailing lists for their customers and build a loyal customer base. I can't even e-mail my customers for the past three years to proactively explain what the CRA has done through this court order and that their personal information will not be shared with the CRA.
-CRA allows Amazon (who now have a virtual monopoly over small business e-commerce in Canada) to require Canadians to pay $40 per month to become a pro seller in order to collect GST/HST while Amazon doesn't require this fee in most, if not all other countries that have a VAT/GST tax.

I could go on, but our government (under the leadership of our current and previous PM, this is a non-partisan issue) has repeatedly worked against small business in Canada, the lifeblood of our economy. If you don't call your MP to complain, this trend will continue over the next 5 years with Amazon Canada's 75% growth rate from 2 billion in 2015 to 3.5 billion in 2016 crushing Canadian small businesses.
Newbie
Nov 12, 2017
19 posts
1 upvote
I was asking about whether or not if my 2017 earnings were considered as my 2016 ones. They hanged up. I will try again.
Newbie
Nov 13, 2017
10 posts
1 upvote
Largo87 wrote:
Nov 14th, 2017 5:49 am
Can't go back and ask for gst from your 2014 customers, 15% on 3 years sales is not a dragon you want to play with.
I had a vendor charge my credit card HST from a sale from 2 years ago. I called the credit card company and the CRA and they told me that it was perfectly legal and that I could file an adjustment of my previous returns and get it back. The paperwork was more hassle than it was worth, that is how the CRA operates.
Newbie
Nov 12, 2017
19 posts
1 upvote
Did not ask about Paypal for Business directly, but I did get hold of them again. This is regarding income tax.

The basic principle of this scheme is that they look at whether your tax account says that you owe outstanding taxes to the government. Given that I did not ever file my taxes, and an income of $24 is not worthy of the government going after you to collect like $-2 tax. Given that I never filed a tax return, I do not have any taxes I owe.

She said that if you are earning more, then you need to pay your taxes.

The first time I called, the agent stated that they have no way of accessing records of such nature (the one that PayPal has sent). They said that they DO NOT send these kinds of emails.

Long story short, IF YOU are a business operating in Canada that is earning more than a small amount of $24, you should make sure that you are filing your tax returns.

I will call again regarding the legal aspects and tax evasion. I am in school right now, so I cannot call them again and again.
Newbie
Nov 12, 2017
19 posts
1 upvote
I want to know if there are any tax experts that can answer my question:
Do I have to declare $24 that I earned through PayPal?

Thanks
Deal Addict
Apr 18, 2013
1078 posts
343 upvotes
Manitoba
GeorgeG837585 wrote:
Nov 14th, 2017 12:48 pm
I want to know if there are any tax experts that can answer my question:
Do I have to declare $24 that I earned through PayPal?

Thanks
You're probably going to prison. Get the lube ready!
Last edited by gbill2004 on Nov 14th, 2017 1:01 pm, edited 1 time in total.
Deal Addict
User avatar
Jan 27, 2007
4831 posts
793 upvotes
Peterborough
bewiseman wrote:
Nov 14th, 2017 10:44 am
Assuming that your interpretation is correct, @don242 has correctly noted that a significant portion of the HST has already been paid through the purchases at the LCBO and Beer Store. However, this confirms the extreme importance of keeping all receipts from The Beer Store and LCBO.

There is an office of Chartered Accountants sitting in the Office down the hall from my own office. I have set an appointment with them to discuss this tomorrow.
It is true that HST is included in the cost of products purchased at the LCBO, but the CRA does not take that into account when doing an audit. You cannot say you didnt charge HST because it was already paid at the time the peoduct was purchased by you. Well, you can, but the CRA wouldnt care, they look at it from the standpoint of a taxable supply. If you have a taxable supply, you must charge hst if you are registered. I THINK you have a taxable supply of both the liquor and the delivery, which means HST on both.

Question - do you take an ITC on the booze you buy at the LC?
Member
Apr 17, 2014
308 posts
167 upvotes
Calgary
GeorgeG837585 wrote:
Nov 14th, 2017 12:48 pm
I want to know if there are any tax experts that can answer my question:
Do I have to declare $24 that I earned through PayPal?

Thanks
Given that I never filed a tax return, I do not have any taxes I owe.
You will have a bigger problem than your $24.
Deal Addict
Apr 18, 2013
1078 posts
343 upvotes
Manitoba
utelurtz wrote:
Nov 14th, 2017 1:05 pm
You will have a bigger problem than your $24.
Why do you say that?
Member
Apr 17, 2014
308 posts
167 upvotes
Calgary
gbill2004 wrote:
Nov 14th, 2017 1:06 pm
Why do you say that?
Because of this.
GeorgeG837585 wrote:

I will call again regarding the legal aspects and tax evasion.
Deal Addict
Feb 9, 2009
4485 posts
2215 upvotes
GeorgeG837585 wrote:
Nov 14th, 2017 12:48 pm
I want to know if there are any tax experts that can answer my question:
Do I have to declare $24 that I earned through PayPal?

Thanks
If the cra comes after you for $24 I'll question how resourceful they are
Deal Addict
Apr 18, 2013
1078 posts
343 upvotes
Manitoba
utelurtz wrote:
Nov 14th, 2017 1:09 pm
Because of this.
He didn't pay tax on $24. What's his bigger problem? Or is he saying that he has evaded more income than the $24?
Deal Addict
Apr 18, 2013
1078 posts
343 upvotes
Manitoba
Sanyo wrote:
Nov 14th, 2017 1:10 pm
If the cra comes after you for $24 I'll question how resourceful they are
The question then is where will CRA draw the line...$24, $100, $1,000, 20,000?
Deal Addict
Jul 18, 2016
1828 posts
661 upvotes
dutchca wrote:
Nov 14th, 2017 1:03 pm
It is true that HST is included in the cost of products purchased at the LCBO, but the CRA does not take that into account when doing an audit. You cannot say you didnt charge HST because it was already paid at the time the peoduct was purchased by you. Well, you can, but the CRA wouldnt care, they look at it from the standpoint of a taxable supply. If you have a taxable supply, you must charge hst if you are registered. I THINK you have a taxable supply of both the liquor and the delivery, which means HST on both.

Question - do you take an ITC on the booze you buy at the LC?
Ok, first of all, what you and others have said appears to correct. I have registered for a Business Number accordingly. I just got off the phone with a CRA/HST agent and here's what I have learned. I will confirm this tomorrow with the accountant.

The LCBO and The Beer Store already charge HST. Therefore, yes, I would take an ITC, if I've understood your question correctly.

So, a $100 purchase would look like this. I would charge the customer $100 + $8 delivery fee + $1.04 HST. I would only owe the CRA the $1.04. Here's why. My revenue is actually only $96.50, since the price of the product at the LCBO/Beer Store includes the HST. So, the revenue equals $100/1.13 + 8 = $96.50. The total HST is $12.54. However I have an ITC of $11.50 - the HST paid at the LCBO. This leaves a net amount of $1.04 owed - the HST on the delivery fee.

My key problem for 2017 and part of 2016 is that I have not been charging the HST on the delivery fee and it would appear that I should have been. This will be painful but not disastrous. I have fixed it already on my website.

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