GST on fees as a business earning UNDER the GST threshold

[new_world_hoarder]

There are a few other gripes & grumbles from sellers who are also being charged GST on their eBay fees.

But...

our Managed Payments sales transactions are being charged VAT (which is a European tax)  when we sell in Australia to Australian buyers. eBay have told us this is GST, so okay, but get it right because it reads VAT on our records.

We supplied our ABN number to eBay when we registered for Managed Payments. We told them all of our personal info and then even took away the number we first thought of. We gave it all.

So when we read the help screens saying that if we had given our ABN details then we would not be charged GST (or VAT), we asked eBay why we were still being charged.

After much transferring of the chat (and several chats & calls later), eBay are now sticking to the story that we have to claim an Exemption from paying GST. 

We have tried to explain that we can't claim an exemption because to claim an exemption means we have to give our GST number. And we can't do that because we don't have one...because we are already exempt by not earning over the ATO limit of $75K as a couple. 

But they do not understand / won't understand / won't look into it / don't understand Australian tax.

I have asked for my question to be answered by an eBay rep who lives & works in Australia so that they can understand what I am talking about. They can't or won't do that either.

Surely someone else has also encountered this? Do we suck it up like we do with all of the other fees? Or is this just plain wrong?  Thanks for your kind replies.

[k1ooo-slr-sales]

I assume that, being an ABN holder, you use the services of an accountant or tax agent.  What do they say about it?

The advice they give you would be more accurate than that provided on these member-to-member discussion boards.

[davewil1964 · Accepted solution]

If you're not registered for GST, it would appear your GST-free ABN is not enough to get you an exemption no other business turning over under $75k gets.

The exemption is predicated on you being liable for GST, not having on you having an ABN. It is specifically designed so that GST is not paid to eBay, but GST offsets to the ATO are also not available. If you aren't registered for GST, you have no claim to avoid paying GST to eBay. Or any other business you deal with.

It would appear eBay is not the only one not understanding tax law.

[treasuretraders2003]

We have a tax accountant that we use once a year, they have been doing our tax for about 10 years.

Good call, we will see if they can verify what we think is true.

We just thought that there must be others on eBay in the same position.

Thanks

[k1ooo-slr-sales]

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@treasuretraders2003 wrote:

We have a tax accountant that we use once a year, they have been doing our tax for about 10 years.

Good call, we will see if they can verify what we think is true.

We just thought that there must be others on eBay in the same position.

Thanks

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the problem with asking on a public discussion board is that no professional will give advice that would be covered by their professional indemnity insurance . . . meaning you will get (free) opinion/advice from plebs like me with zero tax training or credentials, zero financial training or credentials, zero experience of having an ABN or managing a business that collects GST or lodges BAS statements with the ATO.

Any liability I will entertain for opinion/advice I give on these boards is limited to amount someone pays me for the advice ( i.e. $0 )

[digital*ghost]

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@new_world_hoarder wrote:

Do we suck it up like we do with all of the other fees? Or is this just plain wrong?  Thanks for your kind replies.

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I am registered for GST. I do not pay GST on my selling fees.

The only reason I am given this "privilege" is because it does not change the amount of GST revenue the ATO gets from me. 

If I have a $5k GST debt when I do my BAS every quarter, but have paid $500 in GST to eBay (via fees) already, then my debt is reduced by that $500 and I only pay the remaining $4500, the ATO gets $5k no matter what. 

If you aren't registered for GST, you can't claim GST as a credit against a bill, you can only claim it as an expense, and therefore can't get GST-free fees. 

[new_world_hoarder]

Not trying to claim what is not rightly ours.

We were just checking this new fee and asking if it applied to us, our understanding was NO but apparently it is better to suck it up and pay the fees as they are charged, even though they are calling it VAT.

[new_world_hoarder]

All good, just butting heads with eBay for a week and getting different answers every time we spoke to someone. Thought I would ask the other sellers...

[digital*ghost]

Sure, I was just trying to explain (exemplify) why some sellers (specifically only those registered for GST) can get an exemption.

Calling it VAT is new (for eBay, anyway), but it's actually been in place for 3 years (was widely dubbed the "Netflix tax" when it was being introduced. eBay CS reps are infamously uninformed on a lot of things, but their info pages get it right:

https://www.ebay.com.au/help/selling/fees-credits-invoices/taxes-import-charges?id=4121

[sugar249]

Sounds like you are ''butting your head with Ebay'' for something you are not entitled to,   read the GST rules, if you are not registered for GST, you are considered the end user, so you pay the GST.   I would suggest you go to your accountant and get a quick lesson on GST rules.