Paypal ordered by CRA to disclose transaction info

[Rifter]

Only if you make a profit on the car, and how often does that happen?

Buyer(s) still pays sales tax on car every time its sold. It is retarded, Red is 100% correct. One car gets taxed way more than it should in Canada.

example.

I buy a car brand new for 20k. I pay tax on that 20k at time of purchase. All sales tax has now been paid on this car, it should never be taxed again, all tax on total new sale amount has been fully paid.

I sell car 3 years later to buy a newer model. Sell it for 10k. Buyer pays sales tax on that 10k. Now this 20k new car has been taxed on 30k.

Second owner sells it off in a few years for 5k. New buyer again pays sales tax on that 5k. this 20k car has now been taxed 3 times, for a total of 35k being taxed on a 20k car.

Its ridicules.

 

[nakedfrog]

Buyer(s) still pays sales tax on car every time its sold. It is retarded, Red is 100% correct. One car gets taxed way more than it should in Canada.

example.

I buy a car brand new for 20k. I pay tax on that 20k at time of purchase. All sales tax has now been paid on this car, it should never be taxed again, all tax on total new sale amount has been fully paid.

I sell car 3 years later to buy a newer model. Sell it for 10k. Buyer pays sales tax on that 10k. Now this 20k new car has been taxed on 30k.

Second owner sells it off in a few years for 5k. New buyer again pays sales tax on that 5k. this 20k car has now been taxed 3 times, for a total of 35k being taxed on a 20k car.

Its ridicules.

Didn't he say that when you sell the car, you pay tax on it, and the buyer pays tax as well?

Basically. It's the same with cars. If you sell a car you have to pay tax on it and then the buyer also has to pay sales tax, and if he sells it later on, rinse and repeat.

That's what I was referring to. Buyer always pays sales tax on a car here too, nothing unusual there.

 

[KMFJD]

Business account...

ftfp

 

[darkswordsman17]

As usual OP shows that he can't be bothered to know WTF he's talking about on pretty much any topic. Couldn't even be bothered to think about it applying to business accounts. "I don't know if I have a business account or not?"

Also gotta love the hypocrisy. "Whaaaa, why are they going after people not paying taxes properly?!? They should be going after those other people not paying taxes properly!!!"

Which he also had to ignore that the whole issue with the tax havens is that the wealthy have built up an entire network to legally bypass tax laws. But he's also someone who supports conservative politicians, in other words the ones that helped enable all of that (and many other issues that he regularly complains about).

One last point, yeah, I can see why he's probably throwing a fit after him mentioning the "donations" thing on his pages. I'm assuming this is rippling through religious focused press. He's said he works with a church, and there's a shitload of outright fraud being perpetrated by religious groups. Which, fraud isn't the right word since a lot of it is legal I'm sure (again, thanks conservative politicians, because it would be violating their free speech rights to do anything about them fleecing people so they can buy mansions and other junk while their followers struggle to pay their bills).

 

[Rifter]

Didn't he say that when you sell the car, you pay tax on it, and the buyer pays tax as well?

That's what I was referring to. Buyer always pays sales tax on a car here too, nothing unusual there.

Didnt notice he said buyer, and there is nothing usual about it. You dont pay tax on other used goods, you can buy anything else used on craigslist without paying tax, except for cars.

 

[Orsorum]

Right now nothing has changed, it's all speculation, but there must be a reason they want all that info. Either to enforce an obscure law that most people don't know about, or to make a new one. But as far as I'm aware, there's no law saying you have to do anything special for Paypal selling/purchases etc.

There is an ongoing trend in the United States as it relates to sales taxes requiring remote sellers to notify buyers of their payment obligation for sales taxes if the seller did not collect. If a seller isn't required to collect and remit sales tax because it doesn't have presence in the state/local jurisdiction, then the buyer is required to pay it to the jurisdiction. It's called use tax, generally ("for the use of..."), and has always been a complement to sales tax (Constitutional requirement). That individuals usually don't remit it doesn't matter - you're required to pay it. That the states/localities historically did not audit individuals or otherwise impose it automatically (typically in high value transactions like motor vehicles (which anyone who's moved cross state lines can attest to), art purchases, etc.) does not matter. And at scale (pretty sure a good chunk of our 300+ mm citizens owe more than $50 in sales tax on remote purchases), this becomes a very worthwhile audit target. And if you can focus your efforts by data mining the middlemen, all the better. Expect Square and related processors to be next.

Point being, Canada likely has the same aim and would not surprise me if they share the data with the provinces as well for GST and HST purposes. Even things as simple as charging the wrong rate for the destination province can add up

 

[deustroop]

Buyer(s) still pays sales tax on car every time its sold. It is retarded, Red is 100% correct. One car gets taxed way more than it should in Canada.

example.

I buy a car brand new for 20k. I pay tax on that 20k at time of purchase. All sales tax has now been paid on this car, it should never be taxed again, all tax on total new sale amount has been fully paid.

--------------------------
No, completely uninformed.The sales tax is paid on transfers of value . There is no "fully paid" if the vehicle is resold since value is again transferred.Your example is just as wrong.

The sales tax lets say is %10. The first buyer (from the dealer) pays $20K and $2000 tax. The next buyer receives $10K in value and is responsible for $1000 tax. The third pays $5K and $500 tax. Why would the first tax be the only tax?. It isn't. As you said, $35K in value has been transferred and the taxes paid are not just the original amount but have increased to $3500 to correspond with the amount of value that has been exchanged. Every buyer pays tax at 10% of the value they purchased. This is how it works everywhere.

 

[Red Squirrel]

You obviously owe back taxes . Call CRA and settle up. This paypal records thing does not create a new obligation on you. When I receive interest income from a financial account, the institution sends me a record at tax time to report the income and sends a copy to CRA. Just think of PP as a bank.
If you have avoided reporting just a few hundred, don't sweat it, but it does seem you omitted reporting more than that. That's tough but the obligation on a citizen to report income has not changed.
It's pretty clear to me no one was reporting cross border income, from ebay etc. and CRA is moving to ensure tax compliance. That is absolutely fair since I report my income.

But how would I even know to do that? I get my taxes done professionally for that reason, I want to make sure whatever I have to claim gets claimed. I just bring all my papers to my tax person and she figures it out. Nobody ever told me I was suppose to track anything else such as online transactions, or anything outside of Ontario. I thought you only had to claim anything done within the province.

 

[Red Squirrel]

There is an ongoing trend in the United States as it relates to sales taxes requiring remote sellers to notify buyers of their payment obligation for sales taxes if the seller did not collect. If a seller isn't required to collect and remit sales tax because it doesn't have presence in the state/local jurisdiction, then the buyer is required to pay it to the jurisdiction. It's called use tax, generally ("for the use of..."), and has always been a complement to sales tax (Constitutional requirement). That individuals usually don't remit it doesn't matter - you're required to pay it. That the states/localities historically did not audit individuals or otherwise impose it automatically (typically in high value transactions like motor vehicles (which anyone who's moved cross state lines can attest to), art purchases, etc.) does not matter. And at scale (pretty sure a good chunk of our 300+ mm citizens owe more than $50 in sales tax on remote purchases), this becomes a very worthwhile audit target. And if you can focus your efforts by data mining the middlemen, all the better. Expect Square and related processors to be next.

Point being, Canada likely has the same aim and would not surprise me if they share the data with the provinces as well for GST and HST purposes. Even things as simple as charging the wrong rate for the destination province can add up

That sounds like a pain in the ass if that's what they are actually expecting. That's just so ridiculous. That's some serious government overreach. Taxes should be for local (ex: provincial) transactions only and the whole process automated such as tax being charged when you buy or when you get paid etc. That's always how I figured it was.

Makes it not worth selling anything since it's just a can of worms to have to manage all that. I guess that's what the government wants. Why buy something used when you can buy something new form a corporation.

 

[sdifox]

That sounds like a pain in the ass if that's what they are actually expecting. That's just so ridiculous. That's some serious government overreach. Taxes should be for local (ex: provincial) transactions only and the whole process automated such as tax being charged when you buy or when you get paid etc. That's always how I figured it was.

Makes it not worth selling anything since it's just a can of worms to have to manage all that. I guess that's what the government wants. Why buy something used when you can buy something new form a corporation.

You selling used stuff is not the problem they are trying to address. They are targetting people running a business piggie backing on ebay without reporting the income.

Like the people that buy closeout skids and then sell one item at a time on ebay and not reporting the capital gain.

 

[Red Squirrel]

You selling used stuff is not the problem they are trying to address. They are targetting people running a business piggie backing on ebay without reporting the income.

Like the people that buy closeout skids and then sell one item at a time on ebay and not reporting the capital gain.

Yeah high volume profit I could see being an issue, but this still makes me wonder if they are going to just go after individuals too. They are easier targets. Threaten them with a 50k fine and they will pay 5k.

 

[sdifox]

Yeah high volume profit I could see being an issue, but this still makes me wonder if they are going to just go after individuals too. They are easier targets. Threaten them with a 50k fine and they will pay 5k.

Nope. Individuals will be a pain in the ass for cra especially if a judge gets involved.

 

[Orsorum]

Yeah high volume profit I could see being an issue, but this still makes me wonder if they are going to just go after individuals too. They are easier targets. Threaten them with a 50k fine and they will pay 5k.

I can't speak to the CRA, just speculating based on what I've observed in the US. Most states with an income tax have a line for you to self-report use tax (and of course the sellers are required to report gains on property sold). I'm not sure how self-reported use tax numbers were historically audited, but with this sort of data, it becomes another revenue source for auditors to assess.

 

[Orsorum]

To be clear, my example of $50 in unpaid tax (cumulative for a given year) is taken directly from Colorado's example - retailers are required to send summaries to purchasers with $500 or more in purchases in a year.

In any event, this about Canada, so I will bow out and leave this to our resident CAs.

 

[deustroop]

But how would I even know to do that? I get my taxes done professionally for that reason, I want to make sure whatever I have to claim gets claimed. I just bring all my papers to my tax person and she figures it out. Nobody ever told me I was suppose to track anything else such as online transactions, or anything outside of Ontario. I thought you only had to claim anything done within the province.

Generally , and its been said elsewhere, that ignorance is no defence.

The tax preparer you use has you sign the T1 Federal Tax Return she prepares and submits for the taxation year. Remember that ? Sure you do, cause you do it every year, right ? Let me remind you what it says just where you have been signing:

"I certify that the information given on this return and in any documents
attached is correct and complete and fully discloses all my income.

Sign here
It is a serious offence to make a false return."

I would also reevaluate your tax preparer's usefulness. She missed this obvious source of income. What else has she missed?

 

[Mike64]

Why can't they go after all the big corporations that have tax havens instead of going after individuals making small transactions, pisses me off.

'Cos the dirty little not-so-secret is that - for any number of reasons - it's much more cost-effective to take small amounts of money from a much larger group of taxpayers than it is to collect large amounts of money from a smaller, better-financed group.

 

[Red Squirrel]

Generally , and its been said elsewhere, that ignorance is no defence.

The tax preparer you use has you sign the T1 Federal Tax Return she prepares and submits for the taxation year. Remember that ? Sure you do, cause you do it every year, right ? Let me remind you what it says just where you have been signing:

"I certify that the information given on this return and in any documents
attached is correct and complete and fully discloses all my income.

Sign here
It is a serious offence to make a false return."

I would also reevaluate your tax preparer's usefulness. She missed this obvious source of income. What else has she missed?

My income being what is on my T4. I would not have imagined that paypal transactions would count as "income". Especially donate buttons on a site. Though I guess I would need to register as a non profit if I wanted it to legally be considered a donation, now that I think about it. But not sure if you can register a non profit if it does not do charity work. Something I'd have to look into.

I guess this is why things like Bitcoin exist.

 

[BarkingGhostar]

Cheaper, I would think, to just create a whole second identity.

 

[Red Squirrel]

Yeah, I could just run it as a business, problem is, I don't know if it's legal to run a business that is continuously not making profit. But if I ran it as a business I could then declare my costs too. To save on paperwork I probably would not bother with any rooms in my house, then you need two sources of heat etc. I suppose I could do the server room, as technically that's part of all the hobby stuff I do and once I enclose it it, it will have it's own hvac.

I'm going to wait and see what comes of all this though, maybe they really are only going after people who are actually running real businesses and then using paypal instead of traditional methods like interac machines.

 

[Orsorum]

Yeah, I could just run it as a business, problem is, I don't know if it's legal to run a business that is continuously not making profit. But if I ran it as a business I could then declare my costs too. To save on paperwork I probably would not bother with any rooms in my house, then you need two sources of heat etc. I suppose I could do the server room, as technically that's part of all the hobby stuff I do.

It's legal, generally, just not advisable.

Sent from my SM-G935V using Tapatalk

 

[Red Squirrel]

It's legal, generally, just not advisable.

Sent from my SM-G935V using Tapatalk

Yeah that's what I've heard too. Probably more likely to be audited and one tiny mistake somewhere can end up costing you thousands if more. Probably easier to just not have any donation links or anything of that nature altogether.

 

[Rifter]

--------------------------
No, completely uninformed.The sales tax is paid on transfers of value . There is no "fully paid" if the vehicle is resold since value is again transferred.Your example is just as wrong.

The sales tax lets say is %10. The first buyer (from the dealer) pays $20K and $2000 tax. The next buyer receives $10K in value and is responsible for $1000 tax. The third pays $5K and $500 tax. Why would the first tax be the only tax?. It isn't. As you said, $35K in value has been transferred and the taxes paid are not just the original amount but have increased to $3500 to correspond with the amount of value that has been exchanged. Every buyer pays tax at 10% of the value they purchased. This is how it works everywhere.

Why does this only apply to cars? i can go on craiglist and buy a used 5k TV and not pay tax, but buy a 5k used car and get taxed.

 

[Orsorum]

Why does this only apply to cars? i can go on craiglist and buy a used 5k TV and not pay tax, but buy a 5k used car and get taxed.

Because you register the sale of the car. The government knows about the sale and can apply the tax at the time of title transfer. The used TV is harder to track - partly because people pay via PayPal and other means. If they can track the sale and impose the tax via some automated mechanism they most certainly will.

 

[nakedfrog]

Your TV isn't going to be causing much wear and tear on the roads.