Canadian Internet Marketers

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MiKiMe

MiKiMe

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Mar 6, 2008
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Canada
I was wondering if any Canadian affiliates have ever had their accountant tell them they had to charge G.S.T. on revenues they have earned from aff marketing, or any other type of IM for that matter. Or if anyone knows about the laws concerning collectiong GST. I have never heard of any other affiliates or IMers charging GST and I know that I shouldn't but my accountant thinks that since my company is in Canada and I work with some Canadian companies that I should be charging them GST. I have her working on it and trying to find out for me but if someone can give me some info that would be great, links to the info would be great too.

-Thanks
 


I have a GST number but don't charge anyone GST. Mind you I don't deal with any Canadian companies either. I know the feeling of trying to explain to your accountant what you do and how you make about 10 x her salary.

I've dumbed it down to, I own an advertising agency, but it's all online.
 
Cam (Yoink*Gasp*) has an accountant that maintains that GST doesn't need to be charged as long as no tangible product is produced. He used an example of a website designer, if it's all done on the internet, no GST needs to be charged. If you put that design on a jump drive to give to the client, you then need to charge GST.
 
I might be way off but I don't see why you would charge GST if you are not the one selling the actual product. Say you work with a Canadian Aff that charges the buyer GST, you would not charge them GST as well since GST is only suppose to be charged once. I think I would look for another accountant to give you an opinion or contact the government.
 
You only need to charge GST if you have a registered business, a GST number and make more than 30k per year in sales. Like crazyfish, I suspect you don't need to charge the GST since you're not the one making the sales.

Who would you charge it to, anyways?
 
I charge NB.

But if someone could prove to me that we're not providing a service here.. I'd love not to deal with the pain in the ass that is GST.
 
If I wasn't lazy, I would just call CRA and ask, but, well, I am and they probably wouldn't know if we tried to explain it to them anyways.
 
Weird area, my accountant was telling me that I should be charging GST but she doesn't really understand how everything works (affiliate marketing). However, as I understand it we aren't really providing any goods or services directly to the customer. Kinda like a salesman working for a car dealership. It's the car dealerships responsibility to charge their customer GST not the salesman's who works on commission.

Then again I really don't know. This industry is so young still I don't think the CRA would even have a clue what to do about this one...

The question is - are we really providing a service to the affiliate network?

Seems like an easy question to answer but think about it for a minute.
 
Closest thing I've found on CRA's website is:

GST/HST - Sole Proprietors - Selling goods for others

I also think Rasher's quote above about Yoink's accountant is BS. If you provide a service to someone you still need to charge GST, just not PST. If they're out of country, I don't think you need to charge GST, but again.. I don't think any of us are accountants. Best to ask one knowledgeable with internet companies
 
Good point on the car salesman analogy, but when I ask myself what we are providing to the affiliate network, the answer is always a service.
 
So Tob you do charge NeverblueAds GST and they pay it out to you ? My accountant still hasn't gotten back to me so I will post when she figures something out.
 
hookshot said:
You only need to charge GST if you have a registered business, a GST number and make more than 30k per year in sales. Like crazyfish, I suspect you don't need to charge the GST since you're not the one making the sales.

Who would you charge it to, anyways?
Click to expand...
If you are a registered business and you make more than $30K per year, you have to register for a GST account and charge the GST to any Canadian companies that you do business with. Any reputable Canadian company will pay you the GST, but you'll be expected to provide an invoice that shows your GST number, the GST applicable amount and the GST you are charging.

An accountant would be the best to advise you on whether you should register as a business or not, but my opinion is that if you are making more than $30K, you really should be registering as a business. It looks fishy to the government if you don't (unless you aren't declaring anything, which is a separate issue entirely), plus you can start writing-off your expenses.

Like with any other non-internet transaction, the GST is charged to the company to which the service was provided. If the company is a network, they'll worry about whether they need to charge their end client. BTW, delivering leads/clicks/etc. is a service.

Surprisingly enough, the GST department is somewhat aware of the internet business. We had a GST audit a while back and I only had to explain the business model to them once. Considering the overall GST was a very small percentage of the overall sales, they understood the business.

Anyway, as has been said here many times before, your best bet is to talk to an accountant experienced in business accounting.
 
MaxSteve said:
If you are a registered business and you make more than $30K per year, you have to register for a GST account and charge the GST to any Canadian companies that you do business with. Any reputable Canadian company will pay you the GST, but you'll be expected to provide an invoice that shows your GST number, the GST applicable amount and the GST you are charging.

An accountant would be the best to advise you on whether you should register as a business or not, but my opinion is that if you are making more than $30K, you really should be registering as a business. It looks fishy to the government if you don't (unless you aren't declaring anything, which is a separate issue entirely), plus you can start writing-off your expenses.

Like with any other non-internet transaction, the GST is charged to the company to which the service was provided. If the company is a network, they'll worry about whether they need to charge their end client. BTW, delivering leads/clicks/etc. is a service.

Surprisingly enough, the GST department is somewhat aware of the internet business. We had a GST audit a while back and I only had to explain the business model to them once. Considering the overall GST was a very small percentage of the overall sales, they understood the business.

Anyway, as has been said here many times before, your best bet is to talk to an accountant experienced in business accounting.
Click to expand...

Canadian networks deal with mostly American advertisers and they don't and can't charge GST on them. So I don't know is it even possible for Canadian publishers to charge the network GST.

Delivering leads/clicks/etc. is a service but wouldn't only Canadian traffic be eligible for GST?
Since you are from a network, please enlighten us with more information like does MaxBounty payout GST to publishers?
 
Ok, I phoned Revenue Canada and spoke to a G.S.T Ruling Officer, self explanatory name, and I basically let her know my business model. I explained that we do provide a service but I also let her know that we only advertise in the U.S. and the U.K.
Even though I was dealing with Canadian companies and I am also based in Canada, since we are only advertising to non-citizens we would be taxable at 0% G.S.T. This means that we still file our revenues but they are taxable at 0% so we will never owe money but we can receive G.S.T. back on purchases for our company.
 
DirSP said:
Canadian networks deal with mostly American advertisers and they don't and can't charge GST on them. So I don't know is it even possible for Canadian publishers to charge the network GST.

Delivering leads/clicks/etc. is a service but wouldn't only Canadian traffic be eligible for GST?
Since you are from a network, please enlighten us with more information like does MaxBounty payout GST to publishers?
Click to expand...
You'd only charge GST to the Canadian companies you work with. Canadian companies are legally required to pay GST when (legitimately) asked. As a Canadian, transactions with companies that are American are not subject to GST.

MaxBounty pays GST to Canadian publishers if we are provided with an invoice showing the full contact info for the publisher, their GST number and the pre-tax amount, the GST amount and the total amount. We also charge GST to companies that we deal with who are Canadian.
 
Interesting - I'm still not 100% sold.

Our only customers are Canadian (NB, CX, MB.. etc) and we are just targeting US/UK/CA people in our service...

Think I need to meet with accountant and hash this out.
 
Actually, CX Digital is registered in the states and banks there too... although NB now has american bank. hrmm
 
Well this was irking me so I called CRA and to their understanding of the business model I do need to charge GST....yay more paper work, douche bags.
 
MiKiMe said:
Ok, I phoned Revenue Canada and spoke to a G.S.T Ruling Officer, self explanatory name, and I basically let her know my business model. I explained that we do provide a service but I also let her know that we only advertise in the U.S. and the U.K.
Even though I was dealing with Canadian companies and I am also based in Canada, since we are only advertising to non-citizens we would be taxable at 0% G.S.T. This means that we still file our revenues but they are taxable at 0% so we will never owe money but we can receive G.S.T. back on purchases for our company.
Click to expand...

SO if you're site is targeting Canadians then you have to pay GST? Seems sorta shady. I mean how do you track where people are from who purchased something....?

Also, if we're using say Linkshare advertising for Canadian Tire do we charge GST to Linkshare for everything we sell on Canadian tire?
 
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