Results 1 to 19 of 19
  1. #1
    Moderator
    Join Date
    April 6th, 2006
    Posts
    2,689
    Moderator Note: Split from the How Does this Affect Canadians? thread (which is about how the affiliate taxes enacted by US states might affect Canadians)

    The only issue facing us Canadians is our own requirement to collect/track GST on commissions earned from stores in Canada (regardless of network). That affiliate income issue that CanadianDave mentioned..

    Nothing a good accountant won't be able to handle, or explain clearly..
    Last edited by MichaelColey; April 29th, 2010 at 04:41 PM. Reason: Added Split Note

  2. #2
    Member LoneWolf's Avatar
    Join Date
    January 18th, 2010
    Location
    Muskoka, Ontario, Canada
    Posts
    58
    Quote Originally Posted by teezone View Post
    The only issue facing us Canadians is our own requirement to collect/track GST on commissions earned from stores in Canada (regardless of network). That affiliate income issue that CanadianDave mentioned.
    Does that include sales to customers outside of Canada from Canadian merchants?

  3. #3
    ABW Ambassador kse's Avatar
    Join Date
    November 29th, 2005
    Posts
    2,511
    Quote Originally Posted by teezone View Post
    The only issue facing us Canadians is our own requirement to collect/track GST on commissions earned from stores in Canada (regardless of network). That affiliate income issue that CanadianDave mentioned..

    Nothing a good accountant won't be able to handle, or explain clearly..

    teezone, do you have any details on "collect/track GST on commissions earned from stores in Canada" my limited knowledge on GST is that we would have to earn more then 13K (or some number like that) in commissions from Canadian Stores that were bought by Canadians????
    MERCHANTS: Start showing your coupons directly on your site, that way your shoppers will stop leaving your site looking for them!! If not then remove your Coupon Box!!

  4. #4
    ABW Ambassador
    Join Date
    November 25th, 2005
    Posts
    639
    I was talking with someone (a very reliable source) over the weekend who actually asked a CRA auditor aquaintance about how CRA views affiliate marketing and the answer was that anything under $30K (net?) wasn't going to raise any eyebrows but after that we will probably have to pay the GST on all of our AM earnings - no matter where they came from.

  5. #5
    Member LoneWolf's Avatar
    Join Date
    January 18th, 2010
    Location
    Muskoka, Ontario, Canada
    Posts
    58
    Thanks CanadianDave. I do know that the limit for reporting is $30K gross. This is the gross of your commissions, not of the actual sales since you don't sell the product itself. Really, you are selling a service (targeted traffic) to the merchant.

    Theoretically, we don't pay GST, we collect it from our clients and remit it to CRA. I'm still not sure how they can expect us to collect GST from clients outside of the country. Most of them would balk at that especially since they cannot pass the tax on to the ultimate consumer as the GST is supposed to do.

    One advantage to collecting GST is that GST we pay on supplies for our business can be taken out of what we collect. I've never found that to be worth the time it takes to fill out the forms (I've been GST registered for other business) but its better than nothing. Unfortunately, it is a time consuming bunch of red tape that small businesses have to struggle with.

  6. #6
    ABW Ambassador kse's Avatar
    Join Date
    November 29th, 2005
    Posts
    2,511
    Quote Originally Posted by CanadianDave View Post
    I was talking with someone (a very reliable source) over the weekend who actually asked a CRA auditor aquaintance about how CRA views affiliate marketing and the answer was that anything under $30K (net?) wasn't going to raise any eyebrows but after that we will probably have to pay the GST on all of our AM earnings - no matter where they came from.
    I am guessing we would just have to take the 5% out of our pockets and pay them since I would think that no US company would give us the 5%

    In my case they currently get 27% of my earnings so I will wait for them to contact me about the other 5%
    MERCHANTS: Start showing your coupons directly on your site, that way your shoppers will stop leaving your site looking for them!! If not then remove your Coupon Box!!

  7. #7
    ABW Ambassador
    Join Date
    November 25th, 2005
    Posts
    639
    Quote Originally Posted by kse View Post
    In my case they currently get 27% of my earnings so I will wait for them to contact me about the other 5%
    Me too! It is only a matter of time...

    When I asked "my contact" about how the government can take GST for out of country transactions they just gave me "don't be so naive" look.

  8. #8
    Member LoneWolf's Avatar
    Join Date
    January 18th, 2010
    Location
    Muskoka, Ontario, Canada
    Posts
    58
    [QUOTE=CanadianDave;1012901When I asked "my contact" about how the government can take GST for out of country transactions they just gave me "don't be so naive" look.[/QUOTE]

    It's amazing that they think they don't have limits sometimes. But technically, I believe the transaction they are taxing is not the sale of the goods by the merchant, but the sale of services by you to the merchant. I think that they would view that as taking place in Canada. If we tried to argue otherwise, then the IRS would be all over us for US income tax.

    Either way, this is a messy kettle of fish for an entrepreneur to have to sort through. Don't you wish we had a KISS government?

  9. #9
    ABW Ambassador kse's Avatar
    Join Date
    November 29th, 2005
    Posts
    2,511
    I woundering if their are any Canadian Affiliate here paying GST?? If so can you explain the process and what is taxed with regards to GST??

    Also since we are talking Canada & Tax, Are most Canadian affiliate claiming their affiliate income on their personnal tax returns??
    MERCHANTS: Start showing your coupons directly on your site, that way your shoppers will stop leaving your site looking for them!! If not then remove your Coupon Box!!

  10. #10
    Moderator
    Join Date
    April 6th, 2006
    Posts
    2,689
    All affiliate income should be declared on personal (or business) tax returns, no matter where it comes from. Every dime I make from affiliate marketing is taxable, it's no different than any other income stream.

    If you earn revenue from Canadian companies, or companies deemed to have a presence in Canada (loosely defined as "carrying on business in Canada"), then you need to collect GST on that revenue. You need to apply for a GST number, and file an annual return, if you earn more than $30k per year (regardless of how much is GST eligible).

    I believe the only way the government could collect GST on foreign income would be a change in tax law.

    "Generally, services that are performed in whole or in part in Canada for a non-resident are zero-rated. However, exceptions apply to this general provision."

    I'm not an accountant, but I have one.

  11. #11
    Member LoneWolf's Avatar
    Join Date
    January 18th, 2010
    Location
    Muskoka, Ontario, Canada
    Posts
    58
    Thank you teezone for the answers above. The last point you made was one that I suspected was true but since I've not made any foreign income, I wasn't sure (I'm hoping to make some foreign income soon 8=). The term 'zero-rated' sounds familiar.

  12. #12
    Newbie Allan89's Avatar
    Join Date
    April 27th, 2010
    Location
    Canada
    Posts
    3
    Quote Originally Posted by teezone View Post
    I believe the only way the government could collect GST on foreign income would be a change in tax law.

    "Generally, services that are performed in whole or in part in Canada for a non-resident are zero-rated. However, exceptions apply to this general provision."
    Quote Originally Posted by CanadianDave View Post
    ...anything under $30K (net?) wasn't going to raise any eyebrows but after that we will probably have to pay the GST on all of our AM earnings - no matter where they came from.
    teezone, CanadianDave - how can we reconcile these 2 pieces of info? I'm finishing up my Canadian taxes and am mighty confused. I have over CAN$30K in earnings from Amazon.com (USA only, selling to USA customers only), but net after advertising expenses is under $30K. I'm using a T2125 form, and am submitting affiliate income for the first time as commission.

    GST, or no GST? And if yes, how on earth do they expect us to collect?

    Any more info you have on this matter would be very much appreciated.

  13. #13
    Newbie Allan89's Avatar
    Join Date
    April 27th, 2010
    Location
    Canada
    Posts
    3
    I got a bit of clarification today re: Canadian tax law from an accountant. Evidently:

    1] If the affiliate income is from the US AND all associated advertising / promotional expenses are US based (e.g., Google), then GST does not apply to gross incomes above the $30K threshold.

    2] If however, advertising / promotional expenses are subject to GST, then registration is recommended, and GST paid for ad services can then be deducted.

    If anyone has additional info, bring it on.

  14. #14
    ABW Ambassador kse's Avatar
    Join Date
    November 29th, 2005
    Posts
    2,511
    Quote Originally Posted by Allan89 View Post
    ...........

    1] If the affiliate income is from the US AND all associated advertising / promotional expenses are US based (e.g., Google), then GST does not apply to gross incomes above the $30K threshold.
    ................
    So If I make 35K this year and I spend $200 in advertizing on a Canadian Site (pay GST), $500 on google.ca and 95% of my income is from US Companies.

    Do I have to collect/Pay GST???
    MERCHANTS: Start showing your coupons directly on your site, that way your shoppers will stop leaving your site looking for them!! If not then remove your Coupon Box!!

  15. #15
    Newbie Allan89's Avatar
    Join Date
    April 27th, 2010
    Location
    Canada
    Posts
    3
    Quote Originally Posted by kse View Post
    So If I make 35K this year and I spend $200 in advertizing on a Canadian Site (pay GST), $500 on google.ca and 95% of my income is from US Companies.

    Do I have to collect/Pay GST???
    kse, unfortunately, I didn't ask this question of the accountant re: Canadian commission income.

    You may have to pay GST if the commission income from Canadian sources exceeded $30K.

    You can deduct GST paid for Canadian advertisers that collect GST.
    That's the gist of what I understood.

    Unfortunately, the accountant is now unavailable for a followup.

    I'd say do what I wound up doing - calling an accountant / tax specialist & asking the particulars re: that situation.

    Post your findings please!

  16. #16
    ABW Ambassador
    Join Date
    November 25th, 2005
    Posts
    639
    Great thread - I for one will post more info as it arrives in those little brown CRA envelopes...

  17. #17
    Newbie
    Join Date
    August 11th, 2010
    Posts
    3
    I'm actually wondering if this changes throughout the provinces. I just finished reading that the domain name laws are different here as well but actually have a similar way of viewing things, its just that in the states it becomes much more complicated.

    I think thats unfortunately the problems for the states as shown by the number of states on here which have all sorts of tax laws regarding affiliate income. This begs to question where the threshold breaks for certain affiliates who earn x, to xx, to xxx(k) and greater throughout the year.

  18. #18
    notary sojac Herb ԿԬ's Avatar
    Join Date
    January 18th, 2005
    Location
    Central/Western NY State
    Posts
    7,741
    Lightbulb
    Quote Originally Posted by kidsko View Post
    I think thats unfortunately the problems for the states as shown by the number of states on here which have all sorts of tax laws regarding affiliate income. This begs to question where the threshold breaks for certain affiliates who earn x, to xx, to xxx(k) and greater throughout the year.
    the states have different and varying sales tax laws, calling for the collection of same depending on who bought via whom. does not depend on affiliates' income.

    the states do have, of course, income taxes as does the federal government.

  19. #19
    Newbie
    Join Date
    May 6th, 2013
    Posts
    1
    I want to bump this 3 year old thread. GST is gone and I want to ask what has changed since the introduction of HST? At this point I'm inconclusive whether or not I should be collecting HST from my US based affiliate companies as a I'm Canadian.
    Here is my situation:
    -I'm new to this business.
    -I do have a business number as I'm also in another business besides affiliate.
    -I do get paid flat commissions from US companies like GAN and CJ.
    -My website is Canadian.
    -My affiliate income is under 30K last year but maybe over 30K this year.

    So is it zero-rated? Do I have to pay the HST to the government on the commissions?

    Any help from experienced Canadians is appreciated.

  20. Newsletter Signup

+ Reply to Thread

Similar Threads

  1. Any European Affiliates?cpa Affiliates ,Preferably weeks pay。
    By newshow in forum Worldwide Affiliate Marketing
    Replies: 4
    Last Post: June 9th, 2014, 12:30 PM
  2. Canadian Affiliates where are you?
    By richguy in forum Midnight Cafe'
    Replies: 8
    Last Post: February 4th, 2008, 01:30 PM
  3. australian affiliates and GST
    By oscar in forum Australian Affiliates
    Replies: 5
    Last Post: July 4th, 2007, 05:34 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •