Canadian Affiliates and GST - GoFuckYourself.com

Thead · 03-18-2008, 12:57 PM

Do you need to register for a GST account and pay the GST ?

WiredGuy · 03-18-2008, 01:16 PM

If you're a canadian affiliate, you are supposed to collect GST on canadian affiliate programs (Gamma, Platinum, etc...), yes. The advantage though is all your expenses in Canada you can get your GST refunded on (ie: buying hosting in canada, office rent, etc.). In most cases, it should work out to getting a refund if a majority of your sales are from US based sponsors.
WG

Dollarmansteve · 03-18-2008, 01:16 PM

Only if the company sending you money is a canadian company. You can't charge GST to a non canadian entity who is not doing business in canada.

Thead · 03-18-2008, 01:40 PM

Quote:

Originally Posted by WiredGuy

If you're a canadian affiliate, you are supposed to collect GST on canadian affiliate programs (Gamma, Platinum, etc...), yes. The advantage though is all your expenses in Canada you can get your GST refunded on (ie: buying hosting in canada, office rent, etc.). In most cases, it should work out to getting a refund if a majority of your sales are from US based sponsors.
WG

I've heard that If you are doing more than $30K per year in sales, you need to register for a GST. Does that mean $30K per year in sales with Canadian sponsors ?
I've earned only 4k with 1 or 2 canadian sponsors in 2007. 95 % of my sponsors are US based.
So, do you think I have to register for a GST in my case ?

What if the sponsor is US based but the customer buying the membership or the product is canadian ?

Chef86 · 03-18-2008, 01:42 PM

Quote:

Originally Posted by WiredGuy

If you're a canadian affiliate, you are supposed to collect GST on canadian affiliate programs (Gamma, Platinum, etc...), yes. The advantage though is all your expenses in Canada you can get your GST refunded on (ie: buying hosting in canada, office rent, etc.). In most cases, it should work out to getting a refund if a majority of your sales are from US based sponsors.
WG

Good advice wg

WiredGuy · 03-18-2008, 01:59 PM

Quote:

Originally Posted by Thead

I've heard that If you are doing more than $30K per year in sales, you need to register for a GST. Does that mean $30K per year in sales with Canadian sponsors ?
I've earned only 4k with 1 or 2 canadian sponsors in 2007. 95 % of my sponsors are US based.
So, do you think I have to register for a GST in my case ?

What if the sponsor is US based but the customer buying the membership or the product is canadian ?

I'm not sure if the 30k number is based on total sales or just cdn sales, but I do know that is the number (30k). Now the last question is really tricky so I want to make sure I disclaim myself from any legal issues by saying i'm not a lawyer/accountant so this is just my interpretation of the law.

if you're an affiliate of a us-based sponsor, you should not be liable to pay gst on a surfer who joined from Canada (because the transaction is between the surfer and the us based company). If you own the paysite though and have a canadian surfer join the site, you are subject to gst collection. The latter portion of my answer is being fought in court in the case of Dawn's Place. This is still very touchy ground with the CCRA and GST.

WG

Thead · 03-18-2008, 02:18 PM

Quote:

Originally Posted by WiredGuy

I'm not sure if the 30k number is based on total sales or just cdn sales, but I do know that is the number (30k). Now the last question is really tricky so I want to make sure I disclaim myself from any legal issues by saying i'm not a lawyer/accountant so this is just my interpretation of the law.

I know. Actually my accountant doesn't seem to have the answer either. I got a phone call from him today asking me about the GST. I was just asking here on GFY before going to a tax office. I'll try to get an answer about this on paper. I'm sure they will have a hard time understanding what I do for a living and if GST is applicable in my case. I got lots of confilicting answers about this so far.

Quote:

Originally Posted by WiredGuy

if you're an affiliate of a us-based sponsor, you should not be liable to pay gst on a surfer who joined from Canada (because the transaction is between the surfer and the us based company). If you own the paysite though and have a canadian surfer join the site, you are subject to gst collection. The latter portion of my answer is being fought in court in the case of Dawn's Place. This is still very touchy ground with the CCRA and GST.

WG

I read the following quote on a web page but I'm not sure I fully understand. English is not my first language. Anyway, I appreciate your help WG.

"Say you sold a membership for accessing digitized content (from various sources) on your Canadian website to a customer in the United States. Since there are no restrictions as to where the intangible personal property may be used, and the property is not considered intellectual property (nor the provision of a service), the American customer is subject to G.S.T., even if he never comes to Canada."

Quagmire · 03-18-2008, 02:59 PM

According to my accountant its 30k in business income. The one way to partially avoid this is to split your income between a registered business (yourself) and a corporation. That will allow you to get up to 60k in income without having to fuck around with the GST.

because the corporation is its own entity it has its own 30k to work with.

Mutt · 03-18-2008, 03:05 PM

Quote:

Originally Posted by WiredGuy

If you own the paysite though and have a canadian surfer join the site, you are subject to gst collection. The latter portion of my answer is being fought in court in the case of Dawn's Place. This is still very touchy ground with the CCRA and GST.

WG

i thought that case had reached its conclusion and the Supreme Court of Canada decided in favor of the taxman.

i also think that DawnsPlace processed through their own merchant account. if they had used a US third party processor I wonder if it would be a different argument. Because it's the third party biller the customer is paying not the Canadian paysite owner directly.

WiredGuy · 03-18-2008, 03:33 PM

Quote:

Originally Posted by Thead

I know. Actually my accountant doesn't seem to have the answer either. I got a phone call from him today asking me about the GST. I was just asking here on GFY before going to a tax office. I'll try to get an answer about this on paper. I'm sure they will have a hard time understanding what I do for a living and if GST is applicable in my case. I got lots of confilicting answers about this so far.

I read the following quote on a web page but I'm not sure I fully understand. English is not my first language. Anyway, I appreciate your help WG.

"Say you sold a membership for accessing digitized content (from various sources) on your Canadian website to a customer in the United States. Since there are no restrictions as to where the intangible personal property may be used, and the property is not considered intellectual property (nor the provision of a service), the American customer is subject to G.S.T., even if he never comes to Canada."

Never listen to what the tax office says. They work for the CCRA and of course will say you should pay GST. Ask a chartered accountant who works for you and if he feels you should, then you should. Don't take the advice of the CCRA based on what they think you should do...

I never saw that quote before but its also not clear if we're talking about an affiliate or a paysite owner. And their definition of Canadian website isn't clear either, are we talking about the development of the site, the hosting of the site? If its an affiliate site, then technically its an American site since its hosted in the USA and belongs to a USA company. There's a lot of arguments that can be made about this. Your best bet is to get the opinion of a C.A. because it can widely vary.

WG

WiredGuy · 03-18-2008, 03:36 PM

Quote:

Originally Posted by Mutt

i thought that case had reached its conclusion and the Supreme Court of Canada decided in favor of the taxman.

i also think that DawnsPlace processed through their own merchant account. if they had used a US third party processor I wonder if it would be a different argument. Because it's the third party biller the customer is paying not the Canadian paysite owner directly.

I thought it was federal court and surpreme was next, I didn't think that case was Supreme already. Regarding third party billers, I'd be interested to see that argument as well. Technically speaking, you could say that the paysite is being licensed to ccbill/paycom and its their members accessing the content, thereby making your clients the billers and the billers have their own contracts. Considering the IPSP's have their own customer service, support, billing, that could work as well...
WG

Thead · 03-18-2008, 04:10 PM

Quote:

Originally Posted by Quagmire

According to my accountant its 30k in business income. The one way to partially avoid this is to split your income between a registered business (yourself) and a corporation. That will allow you to get up to 60k in income without having to fuck around with the GST.

because the corporation is its own entity it has its own 30k to work with.

Ok, but 30k of income coming form Canadian sponsors ? What if I made 4k with Canadian sponsors and the rest from US based sponsors ?

I made more than 60k so I douldn't be able to split my income between a registered business and a corporation to avoid GST. But I will certainly stop promoting Candian sponsors if it solves the GST problem.

Thead · 03-18-2008, 04:14 PM

Quote:

Originally Posted by WiredGuy

Never listen to what the tax office says. They work for the CCRA and of course will say you should pay GST. Ask a chartered accountant who works for you and if he feels you should, then you should. Don't take the advice of the CCRA based on what they think you should do...

WG

Unfortunately my accountant has no idea and he is the one who advised me to go to a tax office to get an answer. But I agree, I fear they will tell me to pay the GST even if I don't have to. And I don't want have to fight after having paid to get my money back (if i wasn't supposed to pay).

I'm lost....

WiredGuy · 03-18-2008, 04:17 PM

Quote:

Originally Posted by Thead

Unfortunately my accountant has no idea and he is the one who advised me to go to a tax office to get an answer. But I agree, I fear they will tell me to pay the GST even if I don't have to. And I don't want have to fight after having paid to get my money back (if i wasn't supposed to pay).

I'm lost....

He should be the one doing it, not you. You don't know the tax laws and he should be getting the information on what CRA says is and isnt taxable and then making the decision (based on published bulletins on recent tax changes, not by asking the tax office).
WG

WiredGuy · 03-18-2008, 04:18 PM

Quote:

Originally Posted by Thead

But I will certainly stop promoting Candian sponsors if it solves the GST problem.

It really does suck, but the way the tax laws are setup, they're certainly discouraging Canadian affiliates from working with Canadian companies. Say hello to USA based sponsor programs

WG

Boobgirl · 03-31-2008, 02:13 PM

Hi, The Dawn's Place ( paysite) case that went to the supreme court, was arguing that GST should not be paid on ALL customers, Canadian and and all others. This was a case based on 2001 tax year, and they were Canadian based. CCRA was trying to collect GST on ALL transactions- Canadian and all others. Dawn's Place lost the decision.

BUT, refer to the 2007 Federal Canadian Budget, where the Conversatives changed the rules regarding online transactions, and only Canadian transactions were to be charged GST. They also made the change to the GST law to retroactively to when GST was created, so companies that were charged GST, are now available to get refunds.

Boobgirl · 03-31-2008, 02:19 PM

Quote:

Originally Posted by Mutt

i thought that case had reached its conclusion and the Supreme Court of Canada decided in favor of the taxman.

i also think that DawnsPlace processed through their own merchant account. if they had used a US third party processor I wonder if it would be a different argument. Because it's the third party biller the customer is paying not the Canadian paysite owner directly.

This case was based on a 2001 tax year, and a merchant account was not used then, but third party billers. ( Ibill/CCbill/Paypal).

Check the tax court papers and talk further to accountants regarding this case and the changes to the GST law ( federal government budget changes in 2007), and how this could affect Canadian affiaites.

03-18-2008, 12:57 PM	#1
Thead Confirmed User Join Date: May 2005 Posts: 464	Canadian Affiliates and GST Do you need to register for a GST account and pay the GST ? __________________ iPhone Porn

03-18-2008, 01:16 PM	#2
WiredGuy Pounding Googlebot Industry Role: Join Date: Aug 2002 Location: Canada Posts: 34,482	If you're a canadian affiliate, you are supposed to collect GST on canadian affiliate programs (Gamma, Platinum, etc...), yes. The advantage though is all your expenses in Canada you can get your GST refunded on (ie: buying hosting in canada, office rent, etc.). In most cases, it should work out to getting a refund if a majority of your sales are from US based sponsors. WG __________________ I play with Google.

03-18-2008, 01:16 PM	#3
Dollarmansteve Confirmed User Join Date: May 2005 Location: T.O. Posts: 2,849	Only if the company sending you money is a canadian company. You can't charge GST to a non canadian entity who is not doing business in canada. __________________ I died.

03-18-2008, 02:59 PM	#8
Quagmire Confirmed User Join Date: Jul 2005 Location: Stinkin' up your bathroom Posts: 6,490	According to my accountant its 30k in business income. The one way to partially avoid this is to split your income between a registered business (yourself) and a corporation. That will allow you to get up to 60k in income without having to fuck around with the GST. because the corporation is its own entity it has its own 30k to work with. __________________

03-31-2008, 02:13 PM	#16
Boobgirl Confirmed User Industry Role: Join Date: Sep 2005 Posts: 446	Hi, The Dawn's Place ( paysite) case that went to the supreme court, was arguing that GST should not be paid on ALL customers, Canadian and and all others. This was a case based on 2001 tax year, and they were Canadian based. CCRA was trying to collect GST on ALL transactions- Canadian and all others. Dawn's Place lost the decision. BUT, refer to the 2007 Federal Canadian Budget, where the Conversatives changed the rules regarding online transactions, and only Canadian transactions were to be charged GST. They also made the change to the GST law to retroactively to when GST was created, so companies that were charged GST, are now available to get refunds. Last edited by Boobgirl; 03-31-2008 at 02:16 PM.. Reason: Spelling