For Sale .ca sales and the GST

[ianccc]

just a question to pose - When I purchase .ca's I am charged the GST but when I have had one off .CA sales, I have not charged the GST

After a bulk sale of .CA domains my accountant gave me flack for not charging the gst on the sale. My defence was that I am selling virtual real estate and there is no GST on home sales so the same should apply to domains - He did not buy that argument.

Now I never care about paying GST thru my bussiness on purchases because it is recoverable and offsets the GST amount on sales - they never balance out and every quarter I am remitting the difference to RevCan

So what do you folks do - any enlightening loophole to explore

any info appreciated

~ian

 

[DomainsInc]

Don't you only have to pay gst if you are selling to a canadian?

 

[ianccc]

Yes if it's a US sale you do not have to charge GST - I am more interested in what Canadians are doing when selling to Canadians

 

[Jacksplat]

For all Canadian business transactions you being a Canadian business have to collect it and submit it. Not doing so can get you in hot water in a hurry.

Canadian business billing to non-Canadian business do not charge gst.

That said, I go by the book. But I have also been avoiding most Canadian business so I can earn 80 cents on the dollar vs 35 cents.


Kevin

 

[Belzibut]

I sure do my 500% to keep the Government out of my online business including domains.

 

[garyrcanuck]

My accountant explained to me that you must charge the 6% GST on all sales. of course you may claim the 6% you paid on the purchase of the names,along with any other business expense, such as your computer, you know all that business stuff. Of course you would not charge a non Canadian person or business as they cannot own a .ca name. There is a minimum $ value of sales that you if you are under it you do not need a GST #, but then you cannot claim expenses.
Bottom line. Listen to your accountant, ask him all the questions.

2 years ago I was audited as the government questioned all of my online business expense. Came out OK tho

 

[ianccc]

Thanks for the replies folks, I will have to remit the GST on this sale out of my own pocket on this one
but will make sure I charge it in the future

~ian

 

[RazorNF]

As Garycanuck mentioned, there's a minimum amount - so for those of you who do this as a side thing and don't bring in a lot of $ - I believe the magic number is around 30K for any preceeding 12 months.

 

[DropWizard.com]

My accountant explained to me that you must charge the 6% GST on all sales. of course you may claim the 6% you paid on the purchase of the names,along with any other business expense, such as your computer, you know all that business stuff. Of course you would not charge a non Canadian person or business as they cannot own a .ca name. There is a minimum $ value of sales that you if you are under it you do not need a GST #, but then you cannot claim expenses.
Bottom line. Listen to your accountant, ask him all the questions.

2 years ago I was audited as the government questioned all of my online business expense. Came out OK tho

I would think that if you are in the business of selling domains (eg registrar) that might be true. However if you are a long term holder (investor) and take an offer this would qualify as a capital gain and thus gst exempt.

 

[Jacksplat]

I just phoned a friend who works for the GST. He's telling me domains are not GST exempt. I asked for loopholes, angles and he clarified that in no stretch of the imagination is a domain GST exempt. I went on to explain investment, holdings, and so on, even tried the angle of it not being tangable, being a registation and not real property and he stuck to his guns. I've had this discussion with him sometime last year about domains and the GST/taxes and so on. In the past I've treated them like a local business writing them off, claiming expenses and such, but have decided that with the complicated process and misunderstandings from one cpa to the next cpa that it isnt worth it and to keep them as far out of my local business as possible. I have asked accountants (not ca or cpa) and thus far every one of them have said it's ok to write one and the other thing off, but when presenting the same question to a chartered accountant I get the opposite response. Run of the mill accountants don't have alot to lose when making bad choices, chartered accountants however have to be exact, afterall they gotta stamp everything they do. The CA i have now refuses to help me go gray, I had to go to some Toronto guy to help me for the "odd" stuff while she takes care of my sparkling image. thus all the identities, I forget my own name at times.

Kevin i think

 

[denniss]

Ok,

How about we'll go into a slightly grayer area then

What about Paypal transactions with Paypal debit card (the one for businesses, has mastercard digits on it)? What I mean is that this way this money doesn't even pass through a local bank, and AFAIR Paypal never asked for my SIN (although I did register it back in 2001...), and the card came from the US... Can they (provincial/federal govt.) even see these transfers?

 

[ianccc]

I have to admit my acountant is lost when it comes to these domains
(he is a CGA) between the bookeeper and accountant they threw their arms up a long time ago - to many purchase/renewals/pushes/paypal/registrarbalances to keep track of - because this is a part-time venture for me and the purchases are made using my business cash-flow - the accountant counts it as inventory - both bookeeper/accountant have no sence of how many domains are owned

 

[DropWizard.com]

Ok,

How about we'll go into a slightly grayer area then

What about Paypal transactions with Paypal debit card Can they (provincial/federal govt.) even see these transfers?

Thr paypal TOS you agreed to gives them the right to answer any and all questions from an authority such as the rcmp or rev canada etc....

Like so many things it is only a matter of time till rev canada goes fishing so I wouldn't count on this to hide the $$$$

 

[DomainTrader]

Here's the skinny. As a purchaser of domains you pay the gst if you are dealing with a registrar that is registered for gst purposes (most if not all will be) . As a seller of domains you may or may not have to or even be entitled to charge the gst.

You can not charge the gst for the sale of any commodity UNLESS you are a gst registrant. Thats first and foremost. No gst number, you can not charge.

If you have a gst number you must charge gst on sales.

Once you reach more than 30K in sales in a calendar year you are required to register (and are deemed to be registered) for gst and from that point on you must charge gst on all sales.

If you are a non registrant for gst purposes you can not legally charge gst and in fact are prohibited from doing so.

 

[DNGeeks]

As a note, the magic number is $30,000. That includes ALL sales, no matter if they're to Canadian, US, British, French or Mexican customers.

You only charge the GST to Canadian customers, but all of your income counts for having to have a GST number. And yes, when you send in your income tax and you show more than $30k in income they will call you and tell you that you're applying.

And that was a terrible defense to your accountant, he knows more than you so you should listen to him.

 

[Jacksplat]

Ok,

How about we'll go into a slightly grayer area then

What about Paypal transactions with Paypal debit card (the one for businesses, has mastercard digits on it)? What I mean is that this way this money doesn't even pass through a local bank, and AFAIR Paypal never asked for my SIN (although I did register it back in 2001...), and the card came from the US... Can they (provincial/federal govt.) even see these transfers?

I dont have time to quote details but this year the canadian governement has actively been digging for online revenues being earned. They claim to have had some programming done to the effect. Domains are very known to be profitable and hard to track. Using paypal with your name having your CC attached or bank will eventually catch up to you.

I'd also like to agree with DNGeeks about the 30k deal with the emphasis of 30k being your full income and not just your domain income. Can anyone survive on 30k these days ? outside of a campsite that is.
Kevin

 

[Namefox]

If you didn't hear, RevCanada has a new software program in place OR about to be put in place that susses out any and all online transactions. It is an European program that finds online revenue cheaters. RevCanada just bought the program a couple of years back. This thread will probably be indexed by the search engines and RevCanada will possibly find it so if you aren't honest about your online taxes, don't subscribe to this thread.

If you make below 30,000 a year in online sales, you don't have to charge GST on any sales. If you do register for a business number, you can recoup your GST charges on everything related but you will have to charge GST on all your sales or take it off the total sales price.

 

[DropWizard.com]

If you didn't hear, RevCanada has a new software program in place OR about to be put in place that susses out any and all online transactions.

That sounds more like a PR blitz than anything. You'd have to be able to get in a lot of backdoors to access that kind of info. Not to mention the concept of spying on your citizens without warrant or crime to justify it.

And we all know our beloved gov't wouldn't do that...

 

[Namefox]

That sounds more like a PR blitz than anything. You'd have to be able to get in a lot of backdoors to access that kind of info. Not to mention the concept of spying on your citizens without warrant or crime to justify it.

And we all know our beloved gov't wouldn't do that...

I thought it was kind of a scare tactic but I read a few articles like this one here http://www.thestar.com/article/175853 I also have a friend that works for RC and he confirmed it. The spider program is called Xexon.

I agree with you however that they would have to get in a lot of back doors and I believe they are looking for repeat cheaters.

 

[TheLegendaryJP]

Ok simple straight forward question..... ( not refering to .ca sales but rather .com etc )

If you are a Canadian and sale only to individuals outside Canada , therefore not charging GST ( eventhough your income is in excess of $30k and you do have a GST number ) do you still have to pay the GST to Revenue Canada ? You never collected because they didnt have to pay, item ( name ) was bought outside Canada. What does Rev. Can say ?