My dog is 13 years old
I pay 7% tax on her food!!
yet I pay 0% tax on my canned stew!
Sometimes when the labels fall off I cant tell the difference

:2 cents:

:) :winkwink: :)

quiet - we recently filed for GST and made a claim for over $10k in refund (I didn't want to file it because I KNEW it would draw attention but the accountant made me file) and sure enough, I got a letter from GST asking me to explain my position.

I called the contact number and spoke to the guy and he was pretty nice about it and said as long as I faxed or mailed in something letting him know why we asked for a refund (most of our clients are US based and we have recently purchased quite a bit of hardware for resale in Canada) We would recieve the refund shortly. And surprise, we actually received a check within a few weeks.

However, when I called the same guy at GST again to thank him for the fast turn around in getting me the refund he basically told me I could expect a GST audit soon. My business # has been red flagged now or somesuch.

So, I am now attempting to ensure I have all my ducks in a row and my arguments fully prepared. I REALLY would hate to have to pay over $140k in GST at once. Over two years worth of revenue from non Canadian sales. We have been paying GST on Canadian sales already - which is fine since Canadian revenue is such a small % of our incomes... and I feel that is the spirit of the whole GST tax anyways.

But I am starting to get a little nervous. Your story is definitely not heartening.

Thanks for the info BTW.

no problem :)

we got audited for the exact same reason you were. very high input tax credit for gst. i'm not completely sure what your exact business is, but i run paysites, so all income is generated from memberships. less than 5% are Canadian.

what if you didn't claim that very high tax credit :) ? Maybe they would just let it slide...

Yup... sounds too familiar. I am waiting for my GST refund of about $4k. I went thru the same hoops trying to make them happy, explaining our business, details of every transaction we did (a 42 page fax btw), and after all that the woman i spoke to it sounds fine. Three days later, GST audit. That was in March. I have still yet to see a single penny of that refund and it's been pending since then.

I hate revenue canada, or their new fancy name, CCRA.
WG

I'm wondering if the difference would be if you were using your merchant account or their merchant account?


Quiet - (not sure If I should ask this and don't answer if you feel it breaks some sort of confidential info) do you have your own merchant account or do you use Ibill's?

talked to my ca today about this - very detailed stuff. Canadians should take a good hard look at how they structure their business in regards to this issue.

To Quiet> Just a thought, but wouldn't you be able to put something in the signup form such as Check this box if your a canadian citizen/resident checkbox? Seems that would be enough to filter out canadians to me. Just a thought, I imagine you've explored these options very thouroughly, but you never know...

WG

ok, CCRA released the new guidelines for ecommerce in september. http://www.ccra-adrc.gc.ca/E/pub/gm/b-090/b-090-e.pdf

Basically here is the jist of the 32 pages:

For affiliates:
if you get paid for advertising a company's sites/product and they aren't located in Canada or registered in Canada for a GST number, you are providing a zero-rated service. 0% GST, you can still claim tax credits. If you're canadian and use Canadian sponsors, you pay GST on the paychecks you get.

For paysite owners:
Tricky.
According to that paper, if you sell membership to a website and allow users to view/access/download content that isn't your intellectualy property (trademark, patent copyright) then you have to charge/pay PST. From what I saw there, content that is your intellectual property then you are qualified for a 0% rating. It's usually when you do your own billing or have a merchant that you would would be under this braket.

Now it can be argued that you provide a service to ibill ccbill, who are non residents/non registered businesses, to allow their customers to access your website in which case you would qualify to the advertising exclusion. It's IBILL that bills the customers and you get a % of the sales (85-89%).

m0rph3us - do you have a local legal firm you are using? Or are you doing all the legwork yourself here?

No I have an accountant. I'm going to have to see if he can help me indepth with this, if not, I guess I'm going to have to find a better firm.

I'm not canadian but i'm tax audited right now since november last year.. :(

But they have told me income from sponsors outside EU is non taxed.

But when i take the money out of the company i have to pay 50-55% tax anyhow :thumbsup

Gotta love the swedish taxes.

this is a very depressing thread. damn revenue canada or whatever they are calling themselves nowadays.

It sounds like that the only ones who make money on this are the tax lawyers and accountants.

It almost sounds worth it to incorporate in the US and deal with all that hassle.