Etsy Tax Updates For Sellers In Canada
UPDATE 6-30-22
Sellers in Canada are at a loss with Etsy's tax plans, leaving some of them having to add tax into item prices and pay higher fees. Details 👇
Liz Morton ~ Founder
Etsy announces tax updates for Canadian sellers effective July 1, 2022.
Today we’re announcing three tax-related changes that impact you as a seller in Canada. Etsy is required to make these changes as a result of new regulations. They will all go into effect on July 1, 2022.
- Etsy will start collecting Canadian sales tax including GST, HST, QST, and PST on orders placed by shoppers in Canada. Etsy will remit these taxes to the Canadian government on your behalf.
What this means for you: If you already have a GST/HST number, add it to your Etsy account and we won’t charge your Canadian buyers GST/HST on orders for physical items. If you don’t have a tax ID yet, consider registering for one as your business grows.
If you have a Quebec sales tax (QST) number, you can also add that to your account and Etsy won’t charge QST on orders shipped to buyers in Quebec.
You may already be collecting sales tax from your customers and remitting it to tax authorities. Adding your tax ID number ensures that your customers won’t pay GST/HST or QSTs twice—once from you and once from Etsy. Reduce the amount of tax your customers pay by adding your tax ID number.
Add your tax ID number here.
- We’ll also start charging GST/HST on your seller service fees.
Due to these new tax regulations, Etsy is required to charge GST/HST on seller service fees in some instances. If Etsy has already collected GST/HST on the order, you won’t be charged sales tax on order-related fees (payment processing and transaction). GST/HST will always be charged on all other seller services fees such as listing fees, Etsy Ads or Offsite Ads fees, or Pattern subscription fees. You’ll see the tax you pay on your fees reflected in your shop payment account.
- When these changes go into effect we’ll be getting rid of the existing sales tax tool.
We’re getting rid of this tool, which lets you set your own sales tax rates, to ensure that taxes are accurately represented to buyers. We’ll send more reminders about these changes before they go into effect. Add your GST/HST number to your account today to stay ahead of the updates.
If you need help registering for GST/HST or have other questions on your eligibility, please reach out to your tax and legal representative.
- How do I account for the Canada GST - HST - QST sales taxes collected by ETSY?
- Do I still have to break down my taxes GST - HST - QST ?
- Can I just account GST - HST - QST as one simply monthly amount (Taxes & Fees) EXPENSES together as an expense?
- ALSO FOR SALES Taxes GST - HST - QST collected by ETSY, can I just account record for it as in one lump sum amount of (Taxes & Fees) SALES or when accounting for the Government do I still have to separate GST - HST - QST for every sale transaction???
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I am also in ontario and wondering what the consequences would be for not having a tax ID
Just because online platforms like Etsy now have an obligation to collect and remit sales tax should not mean those of us who are required by law to collect those same taxes should lose the ability to do so. The platform is already set up for that, and they are taking that away. Their pat answer is to increase our prices, which is absurd. Sales taxes vary from 5 to 15% across Canada. How can I accurately re-price my products? I’m not allowed to set different prices for different provinces.
More importantly, why has Etsy chosen to make my prices appear up to 15% higher than my competitors because they want me to list products including tax if I have my own HST number, while everyone else’s listings will show before tax prices. Prospective purchasers will scan on by my listings without clicking and thus never know that my prices only appears 13 - 15% higher due to Etsy’s incompetence. I expect to lose a significant portion of my Canadian sales. Frustrating given that Etsy has promoted domestic listings over international ones. It’s not like I can try to make up the lost sales in the USA.
Lastly, why should I paid Etsy 6.5% in transactions fees on any sales tax I must now collect via mandatory tax including pricing. As an Ontario seller, that amounts to a transaction fee for me of 7.35% while others are paying 6.5%, given that our HST rate is 13%.
Have you found a solution?
