Taxes
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- Vectric Craftsman
- Posts: 277
- Joined: Mon Apr 29, 2013 3:37 am
- Model of CNC Machine: Tormach PCNC770
- Location: Cobourg, ON, Canada
Taxes
I just ordered the 10.5 to 11.0 upgrade for VCarve and was charged HST (Canadian version of VAT) of 13% on my order. This is the first time that I've been charged tax on an internet order for electronically distributed software. Why the charge? Insofar as I know Vectric has no Canadian offices. Does Vectric remit taxes to the Canadian government? Have others had this surprise?
- jfederer
- Vectric Wizard
- Posts: 368
- Joined: Tue Nov 27, 2018 1:09 am
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- Location: Horton Township Ontario Canada
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Re: Taxes
New taxation rules were implemented a few weeks ago. Spotify also is charging tax now, and they are based in Sweden. As far as I recall, Revenue Canada mandated that ALL transactions with a purchaser in Canada will now attract the GST/HST. How it's handled in the back end, I don't know.
P.S. If it's a business expense, claim it as an ITC (Input Tax Credit). That's what I do, so my net HST on this transaction will be zero.
P.S. If it's a business expense, claim it as an ITC (Input Tax Credit). That's what I do, so my net HST on this transaction will be zero.
Joe Federer
www.fabrikisto.com incl. Tailmaker software
www.federer.ca
www.fabrikisto.com incl. Tailmaker software
www.federer.ca
- scotttarnor
- Vectric Wizard
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- adze_cnc
- Vectric Wizard
- Posts: 4379
- Joined: Sat Jul 27, 2013 10:08 pm
- Model of CNC Machine: AXYZ 4008
- Location: Vancouver, BC, Canada
Re: Taxes
Technically speaking under the “old” rules you were required to self-asses and remit the HST for your digital puchases yourself—or at the very least the GST portion but not the PST portion (I live in a PST/GST split Province so I can’t say for sure). Individuals didn’t hence, I suspect, the rules were changed to affect all (the Government probably will use the term “level the playing field” between business and personal submitters).
You could lie about your billing address but I expect there are rules about that somewhere in the purchase agreement, your credit card provider’s agreement, Candian Revenue Agency (CRA-ARC)’s rules and regulations, etc.
For non-Canadians:
You could lie about your billing address but I expect there are rules about that somewhere in the purchase agreement, your credit card provider’s agreement, Candian Revenue Agency (CRA-ARC)’s rules and regulations, etc.
For non-Canadians:
- GST=(Federal) Goods and Services Tax
- PST=Provincial Sales Tax
- HST=Harmonized Sales Tax (PST & GST combined for “ease” of application by vendors or greater scope for gouging by Goverment—depending who you ask)
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- Vectric Apprentice
- Posts: 93
- Joined: Sat Aug 19, 2017 1:35 am
- Model of CNC Machine: Joe's CNC 4x4
- Location: Greensboro, NC
Re: Taxes
The days of untaxed goods off the Internet are long gone. Governments have wised up and mandated tax collection. Online software vendors have improved their sales systems to collect sales tax.
Not sure the last time I bought something online that didn't have tax collected.
Not sure the last time I bought something online that didn't have tax collected.
- Tex_Lawrence
- Vectric Wizard
- Posts: 963
- Joined: Fri Mar 25, 2016 11:30 am
- Model of CNC Machine: Shapeoko3XXL; JTech7W; V-CarvePro 12.004
- Location: Dayton, Texas (Don't Mess With My Texas!)
Re: Taxes
I can almost guarantee that the vendors that collect the sales taxes use this as an additional revenue stream, because a local governing body (in my case a State of the USA) is not going to have the teeth to force them (in my case the Chinese on eBay) to report and pay these "taxes" that they collect off of each sale.)
Tex — Crooked Wood Products
Now there's a man with an open mind – you can feel the breeze from here.
Now there's a man with an open mind – you can feel the breeze from here.
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- Vectric Craftsman
- Posts: 277
- Joined: Mon Apr 29, 2013 3:37 am
- Model of CNC Machine: Tormach PCNC770
- Location: Cobourg, ON, Canada
Re: Taxes
That was my assumption. It was particularly galling because I approved the purchase amount and then immediately received a message that $xxx.xx was being paid (the approved amount + tax). I order many items from the UK for use in my hobby machine shop and things are always billed VAT-out and the Canadian tax is collected upon delivery.
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- Vectric Apprentice
- Posts: 93
- Joined: Sat Aug 19, 2017 1:35 am
- Model of CNC Machine: Joe's CNC 4x4
- Location: Greensboro, NC
Re: Taxes
The idea that an online company would claim to collect sales tax across state lines and pocket it is crazy. It's a federal crime. And all for a small amount of extra money.
Small and midsize companies that sell their products online do not have the technical skills to develop and maintain secure ecommerce web sites. These companies pay for these services from ecommerce software vendors that probably number in the hundreds.
Audits are conducted on this manageable amount of ecommerce software vendors at the state level for compliance. There is a huge financial incentive for state governments to make sure companies are collecting and delivering the tax revenue.
Are there a few bad actors collecting a few percent extra and pocketing it? Maybe. But most companies just want to sell their good or service and simply pass on the sales tax burden to customers as mandated by law. They collect the tax, deliver it and move on to the next customer.
Small and midsize companies that sell their products online do not have the technical skills to develop and maintain secure ecommerce web sites. These companies pay for these services from ecommerce software vendors that probably number in the hundreds.
Audits are conducted on this manageable amount of ecommerce software vendors at the state level for compliance. There is a huge financial incentive for state governments to make sure companies are collecting and delivering the tax revenue.
Are there a few bad actors collecting a few percent extra and pocketing it? Maybe. But most companies just want to sell their good or service and simply pass on the sales tax burden to customers as mandated by law. They collect the tax, deliver it and move on to the next customer.
- Rcnewcomb
- Vectric Archimage
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Re: Taxes
The software modules that handle the tax calculations also handle the remittance to the respective government agencies. For worldwide sales there are thousands of different tax rules, and they are constantly changing. Trying to pocket the tax would still require constant updates. The return on investment for the scammer just isn’t there.But most companies just want to sell their good or service and simply pass on the sales tax burden to customers as mandated by law. They collect the tax, deliver it and move on to the next customer.
- Randall Newcomb
10 fingers in, 10 fingers out, another good day in the shop
10 fingers in, 10 fingers out, another good day in the shop
- Tex_Lawrence
- Vectric Wizard
- Posts: 963
- Joined: Fri Mar 25, 2016 11:30 am
- Model of CNC Machine: Shapeoko3XXL; JTech7W; V-CarvePro 12.004
- Location: Dayton, Texas (Don't Mess With My Texas!)
Re: Taxes
You folks are saying that "eCommerce software vendors" are taking legal responsibility for the collection and paying of taxes by one of their customers? That sounds ludicrous on its face. Now one might make the case that the "ecommerce software" must correctly perform the calculation, but to be responsible? Nah.
I have "ecommerce software", and I am the only one subject to audit by the State of Texas Comptrollers office. In my previous three decade business life I've had the same experience. The tax money collected goes in my pocket, and I am responsible for it. The State would perform an audit on my personal books occasionally to determine if I had reported sales, collected tax and paid that tax to the State. My "eCommerce software" vendor would laugh if I asked them to take responsibility for my business practices.
I have "ecommerce software", and I am the only one subject to audit by the State of Texas Comptrollers office. In my previous three decade business life I've had the same experience. The tax money collected goes in my pocket, and I am responsible for it. The State would perform an audit on my personal books occasionally to determine if I had reported sales, collected tax and paid that tax to the State. My "eCommerce software" vendor would laugh if I asked them to take responsibility for my business practices.
Tex — Crooked Wood Products
Now there's a man with an open mind – you can feel the breeze from here.
Now there's a man with an open mind – you can feel the breeze from here.