On Thursday, the Canada Revenue Agency (CRA) announced that sales made online are now taxable. While the ruling applies to all online retailers, the CRA will begin enforcing the law by discriminating primarily against eBay sellers. Revenue Canada will be forcing eBay to turn over sales records to audit Canadian sellers by the end of summer.
The CRA also announced that those who do not comply with the new tax law would face prosecution, including paying outstanding taxes, interest, penalties, and legal fines. Under the Voluntary Disclosures Program, those who have not yet paid what the Canadian government has just determined are taxes already owed can correct returns without penalty.
Canadians only spend about $5 billion online each year, compared to $21.8 billion in the United States. While eBay accounts for a quarter of internet sales in Canada, total retail sales (eBay and others) make up only 3.8% of online transactions by Americans.
(photo by Alistair Howard)
