Tax Agency Probes Large-Volume Sellers

Canada's top eBay merchants could find themselves in hot water.

by staff writer
- Jul 31, 2009

Temperatures in Canada have been cooler than normal this summer, but things could heat up for some large-volume sellers by the end of the season.

The Canada Revenue Agency has announced it will begin reviewing the sales reports of several top eBay Canada sellers to see if they reported their eBay earnings in their income taxes. Those who didn't will face audits starting later this summer—and possible penalties.

"Taxpayers should know that the tax laws that apply to traditional commerce apply in the same way to electronic commerce like eBay selling," says Jean-Pierre Blackburn, Canada's revenue minister. "I strongly encourage eBay sellers, and for that matter, any taxpayer who has not already done so, to correct their tax affairs as soon as possible to avoid penalties and prosecution."

eBay reluctantly turned over names, as well as contact information and sales records of large-volume sellers in November after losing a court appeal to keep the information private. The company does not typically share its sellers' records.

However a judge ordered the information released after the tax agency promised to keep it confidential.

Those who are identified as not complying with Canada's tax laws will have to pay the owed taxes, plus interest and possibly additional fines. However, the agency says it will not punish sellers who voluntarily adjust their reported earnings.

Although the amount of eBay earnings that go unreported is unknown, Canadians spend about $5 billion online a year, according to reports. eBay accounts for about one-fourth of that amount.

"The CRA will continue to vigorously enforce the provisions of tax laws to ensure that all Canadians pay their taxes, thus ensuring a level playing field for taxpayers who comply with Canada's tax laws," the agency notes.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

Other Entries by this Author

Follow Us