Shopping Discussion

GST charge on Online Purchase from USA business

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  • Dec 14th, 2019 3:47 am
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[OP]
Jr. Member
Feb 3, 2019
166 posts
124 upvotes
GTA

GST charge on Online Purchase from USA business

Hi all,

I recently made a purchase online from a USA business shipping from California. I was surprised I was charged tax on the purchase. Additionally, my order confirmation and invoice showed me being charged two different VAT % (one at 12% and the other at 15%).

When I contacted customer service, they said that they charge GST for all order coming to Canada. They are not able to clarify why I was charged two different % that don’t even match my provinces GST rate.

Anyone else ever been charged GST on an online purchase like this?
9 replies
Deal Addict
User avatar
Nov 25, 2004
2545 posts
1328 upvotes
London
pialshgiml87 wrote: Hi all,

I recently made a purchase online from a USA business shipping from California. I was surprised I was charged tax on the purchase. Additionally, my order confirmation and invoice showed me being charged two different VAT % (one at 12% and the other at 15%).

When I contacted customer service, they said that they charge GST for all order coming to Canada. They are not able to clarify why I was charged two different % that don’t even match my provinces GST rate.

Anyone else ever been charged GST on an online purchase like this?
this happens to me when i order from a store in Australia it charges %10 gst witch is aussy sales tax i always just have to contact there customer service and they refund it no questions asked. seems odd a us store would be charging vat as that's Europe's sale tax. the only way they should charging any tax is if there pre collecting the sales tax for your province witch stores like barnes and noble do this. i would call in and request to speak to a manger if they can't explain the charges and refuse to refund the wrong amounts charged id just refuse the package and get a full refund for the order and shop else where.
Deal Addict
Dec 26, 2014
4366 posts
4119 upvotes
Winnipeg, MB
Does this company even have a presence in Canada?

If not I'd say there's a 99% chance they're just straight up pocketing the money. If they're not registered with the CRA (which they aren't required to do if they don't use any Canadian-based resources) then they have no way of actually giving the money to the Government, which means they're just straight up scamming people.
Deal Expert
Aug 22, 2006
27311 posts
13001 upvotes
chemicalxv wrote: Does this company even have a presence in Canada?

If not I'd say there's a 99% chance they're just straight up pocketing the money. If they're not registered with the CRA (which they aren't required to do if they don't use any Canadian-based resources) then they have no way of actually giving the money to the Government, which means they're just straight up scamming people.
iRobot did this, but it wasn't listed as a "tax" but an "International fee"

Also they could be a good guy like Amazon or B&H which will do clearance for you so you don't have to pay at the door, but there'd be no reason to charge a local tax so I doubt this is it.
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Aug 19, 2010
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Vancouver
Maybe they are charging their state tax or whatever? I know When I order from Amazon.com and pickup in the states there’s always USA taxes charged.
Deal Fanatic
Oct 26, 2008
6362 posts
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BC
pialshgiml87 wrote: ....... I was charged charged two different VAT % (one at 12% and the other at 15%).

........ They are not able to clarify why I was charged two different % that don’t even match my provinces GST rate.
1. If this was a large company, my guess would be that the 15% was duty on an item of clothing. Your HST/(GST+PST) would then be applied on top of that.

2. GST is a federal tax, so same for all provinces. You mean that 15% doesn't match your province's HST/(GST+PST) rate.

It is quite common for larger online retailers in the U.S. to collect Canadian taxes and duty on your behalf so that you don't get dinged at the door for that plus brokerage/handling fees.

They do it to avoid having Canadians refuse shipments at the door when asked to pay by the mailman/courier.

Consider a convenience if it is a large order that you would likely having been paying on anyway.
Deal Guru
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Mar 14, 2005
13423 posts
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City of Vancouver
pialshgiml87 wrote: Hi all,

I recently made a purchase online from a USA business shipping from California. I was surprised I was charged tax on the purchase. Additionally, my order confirmation and invoice showed me being charged two different VAT % (one at 12% and the other at 15%).

When I contacted customer service, they said that they charge GST for all order coming to Canada. They are not able to clarify why I was charged two different % that don’t even match my provinces GST rate.

Anyone else ever been charged GST on an online purchase like this?
The company's customer service rep has no idea what is going on, and neither does the company. They should admit this instead of giving wrong answers, investigate, and look into correcting the issue. "I don't know" is very hard for people to say, generally. Clearly, their order system is set up incorrectly.
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Deal Addict
Jan 21, 2018
4372 posts
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Vancouver
Becks wrote: The company's customer service rep has no idea what is going on, and neither does the company. They should admit this instead of giving wrong answers, investigate, and look into correcting the issue. "I don't know" is very hard for people to say, generally. Clearly, their order system is set up incorrectly.
A general rule is that customer service staff of U.S. companies don't know anything about Canada or shipping to Canada, and will likely give wrong answers if pressed about it. Doesn't mean that the company's policy is wrong. Sounds to me like the guesses above about duty are correct.

However if a company is going to charge you GST/HST, then they must remit that to the Canadian federal government, and they are required to have a GST/HST number and tell you what it is. Otherwise they should be reported for fraud and the CRA can go after them, even in the U.S..
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Feb 7, 2017
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macnut wrote: 1. If this was a large company, my guess would be that the 15% was duty on an item of clothing. Your HST/(GST+PST) would then be applied on top of that.

2. GST is a federal tax, so same for all provinces. You mean that 15% doesn't match your province's HST/(GST+PST) rate.

It is quite common for larger online retailers in the U.S. to collect Canadian taxes and duty on your behalf so that you don't get dinged at the door for that plus brokerage/handling fees.

They do it to avoid having Canadians refuse shipments at the door when asked to pay by the mailman/courier.

Consider a convenience if it is a large order that you would likely having been paying on anyway.
This.

Guessing you live in a Province where the combined GST + PST / HST Rate = 12%
(Either BC or Manitoba)

Or it’s the opposite ... 12% is representative of the California Tax (Municipal + State) and 15% is your Provinces combined GST + PST / HST Rate
(All of the Atlantic Provinces ... New Brunswick, PEI, Nova Scotia, and Newfoundland Labrador ... stand at 15% for HST)

When you buy from the USA without being out of Canada for more than 24 Hours, so as to have a Duty Free Personal Exemption, you can be subject to BOTH US & Canada Sales Taxes.

Would be helpful if you had told us where you live in Canada ... as the second largest country on earth, things can differ vastly across this great land

Or better yet ... update your RFD Profile to include a location (even if just a Province) so such Questions don’t have us all guessing and can give you a more definitive answer

Also, VAT here is not the correct word ... as neither Canada or the USA uses this terminology .. it’s referred to in North America as Sales Tax... sure it’s tacked on to the Purchase, but it does matter how / where ... as it can be Municipal, State / Provincial, or Federal. Not using the right term leaves us not knowing what actually was applied in this case, plus not knowing your location also leaves us guessing as to what you bought, and how it was taxed here in Canada.

For further info, refer to the CBSA “I Declare” document
https://www.cbsa-asfc.gc.ca/travel-voya ... e-eng.html
And in particular the Duty & Tax Rate Estimator
https://www.cbsa-asfc.gc.ca/travel-voya ... html#_s16b

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