eBay Canada Sellers to be Taxed!
Posted by the dood on Thursday, July 30th, 2009
Breaking news on Vancouver Sun’s website tells us that eBay has provided seller information and sales records to the Canada Revenue Agency to assess whether or not sellers have been declaring income that they have been generating from the website.
This is pretty big, and it looks like the CRA is going to be sending out a huge number of letters soon requesting sellers to provide proof of tax declaration.
I can’t find the fairness is targeting EBay users when millions of other Canadians are using sites such as Kijiji.ca, and Craigslist.ca to sell their used stuff without paying taxes. Lets also not forget the millions of Canadians who do not report income from garage sales, and local classified ads.
Where is the difference between selling a used car on EBay, or selling a used car through the Autotrader publication or their website Autotrader.ca? I can’t begin to imagine the billions of unreported income dollars from Canadians selling their used cars.
I understand, and agree with, the Canada Revenue Agency going after businesses who do not claim income from EBay sales, but how do you tell the difference? If an individual sells his/her large personal collection of art, books, jewelry, or whatever over a number of months and qualifies as an EBay power seller does that make he/she the same as a business selling art, books, or jewelry? There is no way to separate the two by looking at EBays records as the Canada Revenue Agency intends to do.
If the Canada Revenue Agency takes the action of hunting down people who sold on EBay, it is only fair to pass legislation requiring income reporting from garage sales, classified ads, buy and sell publications, and all other markets for used items.
It is unjust to target a single group of Canadians based on their choice of market place for their used stuff!
Lets just imagine!
Just imagine if EBay charged one simple flat rate for listings, and kept no record of final sale amounts. EBay would then be no different than all the other market places such as classified ads, Kijiji, Craigslist, Autotrader, buy and sell publications, and who knows how many more.
This whole taxing Canadian EBay users situation is a simple matter of the lazy, over compensated, personal at Canada Revenue taking advantage of the fact that EBay has already done the work for them.
Clearly if you find a contractor in a classified ad, and pay him cash to renovate your kitchen, he will probably not claim the income. There are thousands of situations like this out there every day, and Canada Revenue doesn’t have a clue how to control it, so they unfairly target EBay sellers since EBay has made it so easy for them.
Lets also not forget garage sales!
You guys have tons of valid points, but you guys are making one HUGE assumption… you are assuming that eBay is going to go after all the people that are just selling their personal items on eBay Garage-sale style. They likely won’t do this, as in order to tax someone on the income from a sale, they would have to allow them to claim their expenses.. and if people are selling their cars (at a loss most likely) then they would have to pay us, not the other way around.
CRA is likely going to go after those Canadians that have established businesses on ebay with ebay stores, etc and many of those which operate a brick and mortar store in addition to their ebay stores. They will probably check to make sure that these places are declaring their incomes. They are not going to go after joe schmoe selling his old records. If they did, they would be invading every garage sale that had a sign up, and they don’t.
Craigslist and Kijiji are much less business-oriented than ebay and very few sellers on there are selling items as a business and circumventing income tax. eBay on the other hand is a hotbed for this kind of behaviour.
There are thousands of situations that happen every day.. and they don’t have a clue how to control it.. its true. However, they are NOT unfairly targetting ebay sellers. They haven’t even called anyone yet! If you are gaining income from eBay (not selling your used stuff you bought for less) then being targetted is not unfair. You are evading taxes.
I think some common sense needs to be exercised here rather than widespread panic based on unreasonable assumptions.
Here are the problems I see with CRA using EBay’s records:
1. There is no way to separate those who are conducting an act of business for income from those who are simply selling a large collection of personal use items.
2. The Canadian Taxpayer Bill of Rights article 8 states “Canadians have the right to have the law applied consistently”. Using EBay’s records for force Canadians, who sold a large volume of undetermined items on EBay, to pay income tax on those sales clearly contradicts that right. Applying the law consistently would mean pursuing Canadians who also sell large volumes thru other venues such as classified ads, buy and sell publications, and buy and sell websites.
An example would be a Canadian who sells a collection of valuable antiques for a total of $20,000 thru classified ads without paying income tax on that $20,000. If that same Canadian sold those antiques on EBay for the same amount he/she will now have to possibly pay income tax on that amount unless he/she kept detailed records showing money lost on the antiques. The problem is the lack of a law requiring receipts be kept for personal purchases, and the subsequent inability to prove a loss or gain when re-selling those personal purchases.
While there is no doubt that registered businesses who failed to report EBay income have violated Canadian tax laws, any action by the CRA to pursue individuals who sold on EBay is clearly unjust.
Responses to your “points”.
1. How do you figure that? You give the CRA and eBay too little credit.
2. Further to your argument, wouldn’t that mean that the CRA doesn’t have the right to audit a company’s records either because they don’t check eBay and other classifieds ads? Wouldn’t that be a contradiction to audit a company at all based on your argument? And how do you figure that the items are undetermined? Is this an assumption you just made?
The CRA has already stated that they will only investigate sellers who have sold at least $5000 worth of goods for three consecutive months. This is FAR from normal for a regular individual to do. Its not impossible.. but if you are selling over $5000 each month for at least 3 consecutive months, then you will simply have to explain it… and if you aren’t doing anything wrong, what are you so afraid of?
I’m not afraid.. because I haven’t done anything wrong. Same reason I don’t walk around afraid that a police officer will arrest me for stealing a car. He won’t because I haven’t stole a car.
I think its funny.Dumbasses figgered they would never get caught.Knock knock,who’s there? revenue canada you dumbass!
“The CRA has already stated that they will only investigate sellers who have sold at least $5000 worth of goods for three consecutive months.”
Where did you get this information? AFAIK, they were going to investigate all PowerSellers.
I believe it was in an article in the Vancouver Sun? Its been a while.
I’m an eBay powerseller (I sell my original paintings) and I got audited by the CRA a couple of weeks ago for years 2006, 2007 and 2008. If you have nothing to hide, there’s no reason to worry. 😉 It was a piece of cake, and the auditor was super nice. =D
Thanks for sharing your good experience. I agree this is the way it goes. Only those who have something to hide and are in fact evading taxes have to worry.