Links to the Breadcrumb trail
- News
- Local news
- Local business
- Business
Online markets with annual gross revenues of over $ 10,000 – hello, Facebook and Amazon – will have to collect a provincial tax on sales of goods and services sold on their sites
Date of publication:
June 26, 2022 • 5 hours ago • 3 minutes of reading • 5 comments “While the economic rationale for taxing all services, including online services provided to sellers, is stable, BC only does so puts BC at a disadvantage”, says University of BC Sauder School of Business Professor Werner Antoineler, as the new rule could disadvantage online facilitators being set up at BC, as the province will be hard pressed to enforce tax collection outside its own jurisdiction. Photo by Mark van Manen / PNG files
Content of the article
From July 1, British Colombians can pay more for goods they buy through online markets such as Facebook and Amazon.
Advertising 2
This ad is not yet loaded, but your article continues below.
Content of the article
This is because the British Columbia government has made changes that require those online markets, which have annual gross revenues of more than $ 10,000, to collect a provincial tax on sales of goods and services sold on their sites.
This shifts the responsibility to companies like eBay and Amazon to collect PST, not to small businesses that can use a market facilitation site to sell their products, according to the British Columbia Treasury.
In addition, these markets are also required by the province to charge PST to individual sellers for the use of their services, such as aid in listing sales of goods, advertising, warehousing and collection of payments.
This is the province’s latest move to create a more level playing field for online operations, which continue to increase its share of the economy.
Advertising 3
This ad is not yet loaded, but your article continues below.
Content of the article
The British Columbia government expects changes to the PST rules to generate an additional $ 100 million in revenue this fiscal year and $ 120 million next year.
The Canadian Retail Council, which has offices in British Columbia, says the move to treat online markets in the same way as regular stores makes sense because it puts businesses on an equal footing.
But adding PST to services purchased from vendors in British Columbia, often small businesses, will simply add costs to consumers here and make local sellers uncompetitive, as other jurisdictions in Canada have not introduced a similar measure, said Carl Little, senior vice president. on Public Affairs for the Retail Council of Canada.
“It does not exist anywhere else. It’s a new tax between a middleman, like Amazon or Best Buy or Facebook, and someone selling goods, “Little said.
Advertising 4
This ad is not yet loaded, but your article continues below.
Content of the article
The Council is concerned that small retailers in British Columbia will pay seven per cent for these online services on the market, whether the end customer is in British Columbia or elsewhere. This will make them less competitive than other companies operating in other jurisdictions in North America.
In British Columbia, people who buy goods and services through online markets will be charged PST on the goods themselves at higher prices, something like a form of double taxation, according to the retail council.
In addition, the changes serve to demotivate services in the market for finding facilities and thus jobs in British Columbia, says the retail council.
In a written response, Finance Ministry officials said that the application of PST to market services is trying to keep pace with the changing digital economy.
Advertising 5
This ad is not yet loaded, but your article continues below.
Content of the article
There is no explicit breakdown on the tax on services from online resellers, but the ministry said in an email that it expects it to represent less than 10% of the expected additional $ 100 million in tax revenue that will be collected.
Werner Antweiler, a professor at the Sauder School of Business at the University of British Columbia, said online markets collecting PST for goods and services closes the loophole in taxation and helps collect taxes from sellers abroad.
What is different about BC’s approach is the inclusion of PST in the services of online markets provided to sellers in online markets, Antweiler said.
Other provinces or the federal government may follow suit, but this new rule could put online facilitators in British Columbia at a disadvantage, as it will be difficult for British Columbia to enforce tax collection outside of its own. jurisdiction, even in another province.
Advertising 6
This ad is not yet loaded, but your article continues below.
Content of the article
“There is a compromise. Although the economic justification for taxing all services, including online services provided to sellers, is stable, BC alone puts BC at a disadvantage, ”Antweiler said.
In 2020, the British Columbia government introduced new rules requiring vendors of software and telecommunications services, such as Netflix, to collect PST.
This measure was expected to generate $ 11 million in new tax revenue in 2020-21 and $ 16 million in 2021-2022.
ghoekstra@postmedia.com
twitter.com/gordon_hoekstra
More news, fewer ads, faster loading times: Get unlimited, easy access to Vancouver Sun, Province, National Post and 13 other Canadian news sites for just $ 14 / month or $ 140 / year. Subscribe now through Vancouver Sun or The Province.
Share this article on your social network
Advertising 1
This ad is not yet loaded, but your article continues below.
Sign up to receive daily headlines from Vancouver Sun, a division of Postmedia Network Inc.
By clicking the register button, you agree to receive the above newsletter from Postmedia Network Inc. You can unsubscribe at any time by clicking the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300
Thank you for registering!
On the way is a welcome email. If you don’t see it, please check your folder for unnecessary files.
The next issue of Vancouver Sun Headline News will be in your inbox soon.
There was a problem registering. Please, try again
Comments
Postmedia is committed to maintaining a lively but civic discussion forum and encourages all readers to share their views on our articles. Moderation of comments can take up to an hour before they appear on the site. Please keep your comments up to date and respectful. We have enabled email notifications – you will now receive an email if you receive a response to your comment, there is an update on the comments thread that you follow, or if a user that you follow comments on a comment. Visit our Community Guidelines for more information and details on how to adjust your email settings.
Add Comment