GST/HST Account For Affiliate Marketing (Question for Canadian affiliates)

milkii

milkii

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Nov 10, 2009
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I recently incorporated my affiliate marketing business and I was wondering if I need to register a GST/HST account? Since the nature of affiliate marketing does not sell a product or provide a service, I wasn't so sure if I need to register a GST/HST account.

What did you do?
 


If you are doing more than $30K per year on affiliate marketing, you'll need to register for an GST/HST number, even if most of your business is outside of Canada. If you are in Ontario/BC, you'll have to charge HST to the customers that operate out of your province. If you are elsewhere in Canada, you'll need to charge GST to your Canadian customers.
 
Ok, I'm located in Ontario, but how am I going to charge HST on my affiliate commissions from CPA networks in the USA.

I don't think they're going to like it when I tell them, they'll have to pay an extra 13% on top of my affiliate earnings for tax purposes in Canada.
 
Take some time with an accountant to figure this out. Should cost you $100 or less to have a good definitive answer. You might need to give them an offline example (like, a contract salesman working on commission). You could also go for coffee with someone at AdCanadian or MediaTrust and see what they recommend for their Canadian affiliates.
 
zany zoroaster said:
Take some time with an accountant to figure this out. Should cost you $100 or less to have a good definitive answer. You might need to give them an offline example (like, a contract salesman working on commission). You could also go for coffee with someone at AdCanadian or MediaTrust and see what they recommend for their Canadian affiliates.
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That's what I did, my accountant wasn't so sure about the whole GST/HST thing relating to affiliate marketing. He told me to call CRA to ask them, which I did. The CRA said, yes you need to register since I'm making over 30k and I'm providing a service (Sending traffic to a merchant site is a service apparently). So, I tried to register, the lady on the phone asked me who am I'm going to charge GST/HST to. I wasn't sure about that, so she said I can't register unless I know.

So far, from my research, it seems I should only be charging GST/HST to canadian CPA networks, but I don't know that as fact.
 
You should be able to register online at cra for a GST account without them asking you who you "intend to charge."

BTW, the knowledge base of people you get on the helpline at Cra for tax matters can be... ...uneven.


Services to Canadians = Charge GST
Services to rest of world = no tax charged.

P.S. if you accountant "wasn't so sure" about this issue, which is actually pretty freakin' straightforward, maybe you should get a new accountant. It's not like making money on the internet is a brand new thing started yesterday
 
Hide your monies in paypal accounts then transfer it out to offshores :P
 
milkii said:
So far, from my research, it seems I should only be charging GST/HST to canadian CPA networks, but I don't know that as fact.
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That is right. You only charge GST (or HST if applicable) to Canadian corporations. Advertising services to non-Canadians is considered "zero-rated", meaning you don't charge them GST, but you can get the GST back that you pay for services/supplies that you use to generate the business for them.

You don't need an accountant to tell you whether or not you need to collect GST. If you make more than $30K, you have to register for GST and collect/remit as applicable. I've been doing this for years, and I've even gone through a GST audit.

You will need to invoice the Canadian companies for whom you charge GST. The invoices will need your company name, your GST number, the pre-tax amount you are billing for services and the tax amount.

If you aren't using QuickBooks or something equivalent to track this, I'd strongly recommend it. QuickBooks make dealing with the GST pretty painless - with the exception of the occasional time you need to the government directly. That's NEVER painless.
 
Fuck that.

1. Set up fake ad network with bank accounts located outside the country.
2. Write checks to fake ad network for "advertising".
3. Holy shit my net profit was like $15000, you wants tax dollars on that?
4. Live frugally and then move out of the country.
 
joevis said:
Fuck that.

1. Set up fake ad network with bank accounts located outside the country.
2. Write checks to fake ad network for "advertising".
3. Holy shit my net profit was like $15000, you wants tax dollars on that?
4. Live frugally and then move out of the country.
Click to expand...

$15k or $150K?

$15k through a corporation, your tax bite should be close to zero, if not zero, after write-offs that a grade-school dropout should be able to figure out.

Up to $250K (maybe even higher, I forget now), your tax bite as a small business (incorporated) is 15%.
 
Ok, so if I do not work with any canadian CPA networks and only work with US CPA networks, I would still have to register a GST/HST account right?
 
milkii said:
Ok, so if I do not work with any canadian CPA networks and only work with US CPA networks, I would still have to register a GST/HST account right?
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That's right. The government doesn't care where your $30K business is coming from. It's pretty much a regulation that if you are over that threshold, you have to register.

But I wouldn't worry about avoiding Canadian networks. None of them (the reputable ones anyway), will balk at paying you the GST as they recover it anyway.
 
Of course if you want to write off expenses to get tax refunds... if incorporated I dunno if you can do it without the GST/HST account numbers. So if you spend 1000 and pay 14% taxes you get that money back when you write it off on the GST/HST return... I look at it as 14% discount on any purchase (I'm sure in Ontario the tax is less becuz here in Quebec we get owned)
 
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