# CDN Authors - charge Amazon HST/ GST?



## Judy Powell (Sep 25, 2011)

Reaching out to Canadian authors (or anyone else who may have knowledge/ information about this situation):  my accountant advised that I should be charging Amazon.com sales tax  (general sales tax/ harmonized sales tax) on the royalties they pay me.  How in the world do I do that?  

I did a little research online and saw where some Canadian authors say they do not collect GST/HST from Amazon.com and are not required to do so.  On the other hand, I called Canada Revenue Agency and the agent said, yes, I should charge Amazon.com sales tax on the royalties they send me because they are a GST registered company.  I may call CRA again tomorrow and see what another agent says (I have found that, depending on which agent you get, you sometimes get different answers).

Just wanted to know how other CDN authors are dealing with this question.


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## D.A. Boulter (Jun 11, 2010)

I was talking with Canada Revenue when I had trouble figuring out my self-employment forms back in March. The rep brought up that same argument.

I told him that I did not actually sell anything. Amazon is my publisher and it pays me royalties on the books that IT sells. He wondered about the books sold to Canadians. I told the truth: We have no idea where the books are sold via Amazon.com; Amazon sells the books to whomever they choose; they do not provide a breakdown of that information and they do all the accounting. We only receive royalties. That explanation satisfied the CR rep.

I received no corrections on my tax return, so the Government either accepts this or just missed it.

However, I am not a tax expert and who knows what any ruling might be should it go to adjudication or court. Take the above for what it's worth -- an opinion.


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## Judy Powell (Sep 25, 2011)

Thanks for sharing your experience, D.A.  I take it for what it is - your opinion, which I'm glad for, as it adds to my  knowledge base.  Will keep researching this and hopefully we'll also hear from other  Canadian authors.  (Maybe some UK authors might comment as well; I believe they may be in a similar situation as Canadians, with respect to sales tax).


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## @Suzanna (Mar 14, 2011)

UK authors aren't in quite the same position because Amazon sells Kindle books in the UK through the Amazon.co.uk site. Here in Canada, however, ebooks aren't sold through Amazon.ca. Canadians have to purchase their ebooks through Amazon.com, the US site.


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## Ethan Jones (Jan 20, 2012)

I live in Alberta and my accountant tells me I can't charge GST unless I'm incorporated. So, I just report my income from Amazon as any other regular income I receive.

Thanks,

Ethan


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## RachelAstor (Apr 2, 2011)

I'm a Canadian author looking into this at the moment. It's all very confusing since there seem to be no rules set forth for GST collection of this nature. I'll post again when my accountant is able to find a definitive answer for me, but for now, some things to consider:

~ yes, Amazon does have a GST number, and therefore the Canada Revenue Agency says you need to collect GST from them. 

~ BUT, at the same time, I'm not entirely sure the Canada Revenue Agency realizes that we are not actually selling anything to Amazon. We are only collecting Royalties from them - as D. A. points out above.

~ also, intellectual property (which copyright falls under) is NOT subject to GST. This is why we do not have to pay GST if we have a contract with a traditional publisher from whom we receive royalties.

Again, I do not have any final answer (because Amazon words things very carefully to cover their own butts in the agreement), but I'll be back if/when we figure it out.

In the meantime, if anyone has any definitive answers for this, it would be much appreciated!


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## Valmore Daniels (Jul 12, 2010)

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/gst-tps/gnrl/txbl/mprtsxprts/xprtspp-eng.html

and

http://www.cra-arc.gc.ca/E/pub/gm/4-5-3/4-5-3-e.html#P683_39742



> A supply of an invention, patent, trade secret, trade-mark, trade-name, copyright, industrial design or other intellectual property, or any right, licence or privilege to use any such intellectual property made to a non-resident recipient who is not registered at the time the supply is made is *zero-rated.*
> 
> Example
> 
> A Canadian company sells the international rights to operate a global database to a foreign company who pays the royalties to the Canadian company. As the recipient of the supply is a non-resident that is not registered for the GST/HST, the supply of such rights is *zero-rated.*


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## RachelAstor (Apr 2, 2011)

Thanks Valmore, great links. These are some of the documents my accountant is taking into consideration. The problem lies with the fact that Amazon IS a registrant of the GST. Still, I do think the intellectual property/copyright issue will prevail as zero-rated.


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## Judy Powell (Sep 25, 2011)

Thank you all so much, and to you for the links, Valmore.  Very useful.  I will be sharing this with my accountant.


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## RachelAstor (Apr 2, 2011)

Sigh, well after much research from my accountant, they have determined that I do have to pay the GST on the money I receive from Amazon. I asked my accountant how to charge them, and she said there wasn't really a way, I just have to pay the 5% out of our pocket. Lovely, considering all the money we authors are already bringing into Canada and paying directly to the Canadian government via income tax.

The problem is that Amazon is a registrant of the GST in Canada. Quite a bummer, since all year my accountant was "sure" I wouldn't have to pay it, so now it'll be a scramble financially. Boo.

Maybe I should look into how much less distributing to Amazon through Smashwords will be, royalty wise. Ugh. 

Sorry if I got anyone's hopes up.  

If anyone finds out anything contradicting this, I'd LOVE to get a look at it. *smile*


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## Greer (Sep 24, 2011)

RachelAstor said:


> Sigh, well after much research from my accountant, they have determined that I do have to pay the GST on the money I receive from Amazon. I asked my accountant how to charge them, and she said there wasn't really a way, I just have to pay the 5% out of our pocket. Lovely, considering all the money we authors are already bringing into Canada and paying directly to the Canadian government via income tax.
> 
> The problem is that Amazon is a registrant of the GST in Canada. Quite a bummer, since all year my accountant was "sure" I wouldn't have to pay it, so now it'll be a scramble financially. Boo.
> 
> ...


This makes no sense. You aren't selling anything to Amazon, so you shouldn't be able to charge them GST. And if they're collecting GST on the books they sell, then they should be paying it, not you.


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## RachelAstor (Apr 2, 2011)

That's certainly what I thought all along, but my accountant has been through the Amazon agreement, and has concluded that the money we are being paid does work like a sale. 

If there are documents proving otherwise somewhere, I'd love to see them.


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## Greer (Sep 24, 2011)

RachelAstor said:


> That's certainly what I thought all along, but my accountant has been through the Amazon agreement, and has concluded that the money we are being paid does work like a sale.
> 
> If there are documents proving otherwise somewhere, I'd love to see them.


In the terms and conditions, it very clearly says that we are paid *royalties* on sales. And that each vendor is responsible for collecting and remitting all taxes imposed on *their sales* of books. I would think that means .ca collects the GST, and .co.uk collects the VAT. It doesn't seem like it can be correct for GST to be collected twice on one sale, which is essentially what's happening if the store is collecting the GST and remitting it, and then we're supposed to remit it as well.


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## Valmore Daniels (Jul 12, 2010)

http://www.sfwriter.com/gst.htm



> Canadian SF writers should think seriously about registering for the Goods and Services Tax. If, like me, you make almost all your sales to foreign markets, registering definitely makes sense:* since sales outside of Canada are zero-rated (that is, you don't have to collect GST on them)*, registering for the GST means you'll receive a rebate check either quarterly or annually from Revenue Canada, refunding the GST you paid out on purchases related to your business. Since everything from paper clips to airline tickets for your trips to conventions has GST tacked on to it, it makes sense to get that money back. Registering for the GST is the only way to recover that money; you can't claim it in any other way as a business expense.


Emphasis, mine.

Also, I believe Amazon is not a customer. The Agreement is a "joint venture" agreement whereby they deal with the customers, not us. Perhaps a lawyer would be able to define this relationship better than an accountant.


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## Valmore Daniels (Jul 12, 2010)

About half-way down:

http://www.paullima.com/networds/gst.html



> Q. I have some American clients. Do I charge them GST?
> 
> A. No
> 
> ...


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## RachelAstor (Apr 2, 2011)

What I would dearly love to know is WHY Amazon doesn't have to charge GST to Canadian customers for each ebook?

When you buy a book from Kobo or other Canadian ebookstores, each customer is charged GST - I have tested this by buying one of my own books on Kobo - GST is definitely charged. 

When I bought one of my own books from Amazon.ca, the GST was not charged. And yet, presumably it is still required to be collected by the government. 

I'm more confused than ever, but at this point I don't know what to do about it without definitive documentation.


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## CJArcher (Jan 22, 2011)

I'm an Aussie not Canadian but we have GST here too. I'm also not an accountant or tax agent so take this with a grain of salt   But I think it may have something to do with how Amazon treat us, their authors. They are paying us royalties, so they're acting like a publisher, and I believe that means we don't have to worry about collecting GST. That doesn't explain why they're not charging GST on sales to Canadians, Aussies, Kiwis etc. I don't get that part.

It's interesting that Apple is different and I do pay GST on sales made to Aussies and I have to report this to my tax dept. They don't act like a publisher, but are a shop front and I am a supplier and therefore liable to pay GST. To upload directly to Apple, Aussies must be registered for GST with our ATO and have to supply evidence of that to Apple before they'll approve your account. Every month, Apple sends me a statement telling me how much GST I  must pay - this is GST only on Aussie sales, not other places that have GST, because I'm a resident of Australia only and not liable to pay the GST in Canada, NZ etc. I then pass this onto my accountant (my hubby) and he works out our GST payable every quarter. It's very easy and clean. 

But I believe (and don't take this as gospel) the difference between Amazon and Apple is the way they treat us, the author. At one venue, we're receiving royalties (although I don't necessarily agree with this definition or see how it could stand up in court, but I'm not tax lawyer), and at the other, we're a supplier/vendor. It's darn complicated, though, and IMO a grey area that's open to interpretation.

Back to answering the OP's question - get another opinion. If I were you, I wouldn't want to be paying that GST if I didn't have to. I honestly think the accountants aren't very sure on this themselves, and it can be interpreted either way.

As an aside - why does being a non-US author have to be so hard?   *shakes fists at the Gods of publishing and tax**


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## Judy Powell (Sep 25, 2011)

I just got a call from an agent of the GST/ HST Department of Canada Revenue Agency who advised that I should ignore sales outside of Canada (i.e., ignore sales on Amazon.com, .co.uk, Japan, France, etc) but only focus on sales on Amazon.ca.  He said I should contact Amazon and let them know that I need to collect HST from them for the Amazon.ca sales (he said HST only, not GST, as I am in Ontario).  He advised that if Amazon refuses then I should call him back and we will discuss further.  I asked if he could send me something in writing and he says he'll send me confirmation in the mail.  Once I get this confirmation I will provide further update.  I will also update on response from Amazon.

Hopefully, we Canadian authors can soon put this question to rest.


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## RachelAstor (Apr 2, 2011)

Hey Judy, did you ever get anything more recent on this? My accountant put in a request to Revenue Canada back in April to do a determination (or whatever it's called) on this issue. Still haven't heard back. Now that there is an Amazon.ca, I'm hoping at the worst, we'll just have to pony up for the GST on Canadian sales - a much better prospect than all Amazon sales.


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## Guest (Jul 26, 2013)

I'm confused. Why is everyone assuming amazon.ca is NOT collecting GST? 

I placed and order recently on Amazon.uk (it was for a book shipping to the UK) and I was charged VAT. I assume Amazon.ca does the same thing. Where did this assumption come from that Amazon is not collecting GST and sending payments to Canada? I mean, those of you who live in Canada, when you place an order on Amazon.ca do they charge YOU? I mean, is GST charged at every step of the production process in Canada? i.e. If I sold iron widgets, would GST be charged on the iron I purchase to make the widgets, then would I charge GST when I sell the widgets to Joe's Widget Shop in Anywoot, Canada, and then Joe would charge GST to the customer who came in and bought widgets? 

I don't understand.


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## @Suzanna (Mar 14, 2011)

Bards and Sages (Julie) said:


> I'm confused. Why is everyone assuming amazon.ca is NOT collecting GST?
> 
> I placed and order recently on Amazon.uk (it was for a book shipping to the UK) and I was charged VAT. I assume Amazon.ca does the same thing. Where did this assumption come from that Amazon is not collecting GST and sending payments to Canada? I mean, those of you who live in Canada, when you place an order on Amazon.ca do they charge YOU? I mean, is GST charged at every step of the production process in Canada? i.e. If I sold iron widgets, would GST be charged on the iron I purchase to make the widgets, then would I charge GST when I sell the widgets to Joe's Widget Shop in Anywoot, Canada, and then Joe would charge GST to the customer who came in and bought widgets?
> 
> I don't understand.


This assumption that Amazon isn't collecting GST baffles me, too, and unless it's confirmed otherwise, I'm going to continue to operate under the assumption that they do.

The government keeps a close eye on these things. I remember the newspaper articles about how Indigo was trying to keep Amazon from opening a fulfillment center here in Canada and for years they were successful. I imagine Amazon had to do some hoop jumping in order to finally get their fulfillment center(s) here. Same with digital content. While I may have grumbled from time to time about Amazon treating us like second-class citizens, logically I think it's just that they weren't allowed to sell digital content here. That's recently changed and I'd be willing to bet that all the add-ons we're now seeing to the Amazon.ca store are a result of agreements Amazon has made with the Canadian government. I can't imagine that government saying, "Sure, go ahead and sell your stuff here tax free."


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## Faye Hunter (Jun 5, 2013)

Amazon.ca charges GST/HST etc. based on shipping destination within Canada. It is right on their webpage here: http://www.amazon.ca/gp/help/customer/display.html/ref=help_search_1-1?ie=UTF8&nodeId=918716&qid=1374877819&sr=1-1


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## D.A. Boulter (Jun 11, 2010)

Bards and Sages (Julie) said:


> I'm confused. Why is everyone assuming amazon.ca is NOT collecting GST?
> 
> I placed and order recently on Amazon.uk (it was for a book shipping to the UK) and I was charged VAT. I assume Amazon.ca does the same thing. Where did this assumption come from that Amazon is not collecting GST and sending payments to Canada? I mean, those of you who live in Canada, when you place an order on Amazon.ca do they charge YOU? I mean, is GST charged at every step of the production process in Canada? i.e. If I sold iron widgets, would GST be charged on the iron I purchase to make the widgets, then would I charge GST when I sell the widgets to Joe's Widget Shop in Anywoot, Canada, and then Joe would charge GST to the customer who came in and bought widgets?
> 
> I don't understand.


I don't think it's Amazon's collection we're worried about. See, it's called GST -- Goods and Services Tax. We, as authors, provide either goods or services -- depending upon how you look at it. If we operate as a business, then we have to tax Amazon for supplying them with our good -- be it intellectual or 'real'.

So, theoretically, I ship a book to Amazon and charge them $2.10 for it (assuming a $3 book at 70% royalty). I therefore have to charge Amazon 5% GST on that book. Amazon then takes my $2.10 book and sells it to you (a customer) for $3 and changes you 5% GST upon it. I have to pay the Govt the GST I collected from Amazon, and Amazon has to pay the GST they collected from you. (I'm sure that there is some form where Amazon can offset the GST they pay from the GST they collect, but I'm not an accountant, so don't know.)

What gets confusing is: 'Who is Amazon?' and 'Who are we'? If we are the wholesaler shipping goods to Amazon, the retailer, then that's one thing. If Amazon is a publisher, that's another.

Were I actually printing books in my basement, packaging them up and shipping them to the Amazon bookstore, where they would sell them to their customers, it would be quite clear. I'd charge them tax for buying the copies of my book. But I'm not sending them books. I'm allowing them to sell the intellectual property (the file I uploaded, which they then compiled into their own file) to customers who desire it. So, did they publish my book and are paying me royalties, or are they retailing goods they've bought from me?

In answer to your question: Yes. If I make screws and you buy them to make a bed frame, I'll charge you GST. You, who buy the screws and the framing, then sell it to a company that sells beds. That company also buys castors (the bed rolls) mattresses, and headboards from other companies, paying GST on each component they buy. They then put the pieces together and sell the bed (wholesale) to furniture stores, again charging GST. The retailer then charges the end-user GST on the bed.


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## Mark E. Cooper (May 29, 2011)

I also have this concern over here in the UK. I have only recently gone full time (made redundant last week as a matter of fact) and finally took the plunge to set up a proper company name all registered properly. I've had a company website and trademark for years, but never needed to make the final step of registering at Companies House. Before this, I wrote and declared extra income myself without the aid of an accountant. This year I WILL have an accountant and the first thing he asked me is "Are you VAT registered?" I said no, I don't sell anything. I get royalties.

He looked at me doubtfully and said, "going by your income, you WILL need to be vat registered!"

BUT WHY? VAT is charged by amazon, paid by the reader, and given to the government. How many times must the same "good" pay VAT to the blinking government? The answer is every time it is sold to someone new. So am I selling by digital files to amazon? I don't think so. I think Amazon is selling them FOR me, so they are only being sold once per reader not twice and so VAT is charged only once... <winces> yes?


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## Guest (Jul 30, 2013)

D.A. Boulter said:


> In answer to your question: Yes. If I make screws and you buy them to make a bed frame, I'll charge you GST. You, who buy the screws and the framing, then sell it to a company that sells beds. That company also buys castors (the bed rolls) mattresses, and headboards from other companies, paying GST on each component they buy. They then put the pieces together and sell the bed (wholesale) to furniture stores, again charging GST. The retailer then charges the end-user GST on the bed.


I have a newfound affection for my own IRS now.  Here in the U.S. sales tax in general is only charged on the end purchase (there are a few rare exceptions). There is no sales tax on items purchased for production or for resale.


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## D.A. Boulter (Jun 11, 2010)

Bards and Sages (Julie) said:


> I have a newfound affection for my own IRS now.  Here in the U.S. sales tax in general is only charged on the end purchase (there are a few rare exceptions). There is no sales tax on items purchased for production or for resale.


Well, like I said, I each step along the way can use GST paid for goods from suppliers offset the GST which must be paid for goods sold. So, if I sell you $100 of screws for your frames and charge you $5 GST, you can claim that $5 on your tax forms when it comes time to remit the GST you collected for selling your frames.


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## Guest (Jul 30, 2013)

D.A. Boulter said:


> Well, like I said, I each step along the way can use GST paid for goods from suppliers offset the GST which must be paid for goods sold. So, if I sell you $100 of screws for your frames and charge you $5 GST, you can claim that $5 on your tax forms when it comes time to remit the GST you collected for selling your frames.


We call that giving the government a loan with zero interest.  It's like people here in the U.S. who claim zero dependents on their W-9s so that they can get a bigger income tax refund at the end of the year and then treat that refund like it is free money. I don't want to give the government my money to hold on to all year just to give it back to me with no interest, particularly when I could be investing it or spending it on things I want.


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## Zoe York (May 12, 2013)

Do authors need to charge any other publishers GST?


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## Guest (Jul 30, 2013)

zoeyork said:


> Do authors need to charge any other publishers GST?


Based on new information, I think the issue may be that Canada doesn't recognize Amazon as a publisher. The problem is that, despite Amazon claiming it pays royalties, it is actually paying net proceeds from sales. Amazon is NOT your publisher. You are the publisher. Amazon is a retailer who sells your books. Your relationship with Amazon is not one of Publisher/Author. It is one of Retailer/Manufacturer. If GST is owed at every step of the process, then yes, the GST would in fact be due if Canada is not recognizing Amazon as a publisher but as a retailer.


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## Zoe York (May 12, 2013)

Right. (Not enough coffee)

There's no way that the "right" thing to do is remit GST that you have not actually collected. So the hypothesis is that we need to be collecting HST/GST (depending on the province) from Amazon? Holy crap.


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## Zoe York (May 12, 2013)

Because GST/HST is a tax paid by the consumer on a final product. It's collected through the manufacturing and sales chain, but as a PP said, at each level, if you then re-sell a product, you can claim back the GST you paid. 

It's definitely not right for the manufacturer to "pay" GST on something they produce.


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## Sarah Ettritch (Jan 5, 2012)

I'm not an accountant, but...

1. Since Amazon requires a W-8BEN form or it withholds 30%, it's treating payments as royalties, which implies that it's acting as a publisher.

2. You only have to collect HST/GST if you're registered for the HST/GST, meaning you have an HST/GST registration number. You don't have to register until your business is grossing at least $30,000 per year. Some people register anyway, because you can't claim any business-related HST/GST you've paid unless you're registered for the HST/GST. But registering means submitting forms every quarter, so many skip it. So...if you're not registered for the HST/GST, you don't have to worry about collecting it.

I'd be surprised if Canadians registered for the HST/GST are supposed to be collecting it from Amazon.  (Amazon collects it from Canadians when sales are made.)


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## Judy Powell (Sep 25, 2011)

Hi, guys.  Sorry I missed the discussions.  

Last time, I mentioned my conversation with the Canada Revenue Agency agent who said I should not concern myself with collecting GST on sales from Amazon.com or uk, etc.  I should only collect from Amazon.ca.  I did receive the promised letter - 3 pages long - but to tell the truth it goes around in so many circles I can't make head or tail of it.  Neither can my accountant.  It's like it was designed specifically to confuse us by not giving a definitive answer so that, whatever whim occurs to them at tax time, they are covered and can implement.

I contacted Amazon.com who said they would look into this tax thing.  Two weeks later they e-mailed me to say they had no idea how to handle it so I should contact Amazon.ca directly.  That was last month.  To tell the truth, I haven't reached out to Amazon.ca yet.  I'll try to send them a note this week and will share the response once I hear back.

The long and short of it, I think, will be that I have to pay Revenue Canada GST for books sold on Amazon.ca but I have a feeling it will have to come out of my pocket as I doubt Amazon.ca will be forwarding to me any GST collected on my books.

Will let you all know what I find out.


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## Zoe York (May 12, 2013)

Judy, that doesn't make sense. If tax wasn't paid by a consumer, how can you pass it back to the government? You are not the consumer, so you don't have to pay GST. You are being advised to collect it, maybe ... but that would mean that Amazon.ca would need to change how they pay you. There are thousands of people in the same position as you - you shouldn't do something different than all of them. 

I wonder if it would be worthwhile consulting a different accountant?


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## Judy Powell (Sep 25, 2011)

Update:

I finally got a response from Amazon. Here it is:

Hello Judy,

Thank you for contacting Amazon KDP.

Regarding your concerns about the tax collection I would like to apologize for any misunderstanding you have had until now.

I would like to inform you that the price of the books that you are seeing on the Amazon Canadian marketplace is including the tax amount charged to each customer. in this case Amazon is already charging the customers and transferring to you that amount, for that reason you are responsible to report your taxes to Revenue Canada.

If you have any further questions you can contact us by clicking on the link below:

https://kdp.amazon.com/self-publishing/contact-us

Thanks for using Amazon KDP.

Based on the above my understanding is that I would have to pay the GST (on Amazon.ca sales only) out of pocket as I don't see where the prices were increased to cover sales tax. However, I am going to tell my accountant that I will not be forwarding anything to Revenue Canada as I do not make anywhere near the $30,000 threshold on Amazon.ca sales. I hope that will satisfy my accountant.

If there are any further developments I will let you all know.


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## Guest (Oct 31, 2013)

Judy Powell said:


> Update:
> 
> I finally got a response from Amazon. Here it is:
> 
> ...


Wait, that makes no sense. Just to illustrate how I am interpreting this:

My book sells for $2.99. I get paid 70% from Amazon. So Amazon would pay me normally $2.09.

According to Amazon, they are adding the tax to the retail price. So they actually charged the customer 10% more (or whatever the rate is. I'm just using a random number for math purposes.) So according to Amazon, they charged the customer $3.28. If they are adding the tax to my payment, are they paying me $2.38? ($2.09 + .29). But how are they listing that extra .29? Is it broken out in a different column? Are they going to report that as income they paid you? This sounds all kinds of wrong.


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## Guest (Oct 31, 2013)

I disagree with D.A. Boulter's statement.
He said that if he were printing his books, "I'd charge them (Amazon) tax for buying copies of my book."
Amazon would be exempt because it is buying the books for resell. Amazon would charge the customer sales tax and pass that tax to the state.
Boulter could not charge Amazon sales tax.


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## D.A. Boulter (Jun 11, 2010)

Okey Dokey said:


> I disagree with D.A. Boulter's statement.
> He said that if he were printing his books, "I'd charge them (Amazon) tax for buying copies of my book."
> Amazon would be exempt because it is buying the books for resell. Amazon would charge the customer sales tax and pass that tax to the state.
> Boulter could not charge Amazon sales tax.


Buying for resale isn't tax exempt in Canada, as far as I can discover. If I buy, I pay GST, then I claim ITC (tax credit to offset the GST I paid) when I sell, so that the transaction is tax-neutral. Canada doesn't operate by the same rules that the US does. If you have a link to show different, please post it.


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## Judy Powell (Sep 25, 2011)

Bards and Sages (Julie) said:


> Wait, that makes no sense. Just to illustrate how I am interpreting this:
> 
> My book sells for $2.99. I get paid 70% from Amazon. So Amazon would pay me normally $2.09.
> 
> According to Amazon, they are adding the tax to the retail price. So they actually charged the customer 10% more (or whatever the rate is. I'm just using a random number for math purposes.) So according to Amazon, they charged the customer $3.28. If they are adding the tax to my payment, are they paying me $2.38? ($2.09 + .29). But how are they listing that extra .29? Is it broken out in a different column? Are they going to report that as income they paid you? This sounds all kinds of wrong.


Went in and checked a couple of my Amazon.ca sales items and I don't see where anything extra has been added to my royalties that could represent sales tax collected in Canada and then passed on to me. If my accountant (or Revenue Canada) determines that I need to pay the sales tax on all of my books sold on Amazon.ca I will just have to pony up the money out of pocket. Hopefully, though, because I do not hit that $30,000 threshold on these Canadian sales they will accept my position that I am not required to pay the sales tax.


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## Catchy (Mar 3, 2012)

Amazon is the retailer. It is their job to collect any applicable taxes and pay them to the various provincial governments along with their federal taxes at year end. 

You, the author, are responsible only for paying whatever income tax is due on the income you made from sales via royalties. 

If you sell on Amazon Marketplace, then YOU are the direct seller, paying a fee basically for advertising and processing services, so in this case YOU are responsible for collecting and submitting any applicable taxes from customers.


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## @Suzanna (Mar 14, 2011)

Amazon already charges tax on goods sold in Canada - see the Amazon.ca page here about taxes. In particular:



> Any orders that are shipped on or after April 1, 2013 will be charged applicable taxes based on the above rates unless otherwise noted.


Also:



> Kindle books, subscriptions and active content titles sold by various publishers are subject to tax based on the publisher's tax reporting obligations and the taxability of digital books in those provinces. As a result, tax for Kindle books sold by the publisher may differ from the tax to which you've been accustomed for Kindle products.


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## JaroldWilliams (Jan 9, 2014)

Wow! Suddenly I feel a renewed thankfulness that I am an American.


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## Kelly Jamieson (Jun 30, 2011)

It's been almost a year since the last post, but I've just encountered this issue and wonder if anyone has more recent info. I have my accountants looking into it as well but it seems there are various answers. 

CRA contacted me the other day to tell me I needed a GST account and I should be collecting GST on royalties from Canadian publishers. This would be Kobo and Amazon.ca. They did tell me that GST applies to foreign royalties, but at 0% (whatever the point of that is, I don't know.). Like others noted above, I don't understand how Kobo can charge GST to a customer who buys a book, but also has to pay me GST when sell my book. They haven't bought anything from me. They only pay me if someone else buys the book. And if this was the case, shouldn't CRA be telling these businesses, Kobo and Amazon, that they need to be doing that? If it's up to us to collect it, good luck! And I certainly don't want to pay it out of my own pocket. 

Any experience with this or advice would be appreciated!

Kelly Jamieson
www.kellyjamieson.com


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## anotherpage (Apr 4, 2012)

Judy Powell said:


> Reaching out to Canadian authors (or anyone else who may have knowledge/ information about this situation): my accountant advised that I should be charging Amazon.com sales tax (general sales tax/ harmonized sales tax) on the royalties they pay me. How in the world do I do that?
> 
> I did a little research online and saw where some Canadian authors say they do not collect GST/HST from Amazon.com and are not required to do so. On the other hand, I called Canada Revenue Agency and the agent said, yes, I should charge Amazon.com sales tax on the royalties they send me because they are a GST registered company. I may call CRA again tomorrow and see what another agent says (I have found that, depending on which agent you get, you sometimes get different answers).
> 
> Just wanted to know how other CDN authors are dealing with this question.


No that is bad advise. You only charge HST to people within Canada for a service or product.

AMAZON is an american company. They are basically reselling your product thats why they have the right to drop prices as they choose. They give you 70% and they get 30% like clickbank.

I had this whole discussion with HST company themselves about clickbank.


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## theVault (Jul 1, 2015)

This is an ancient thread but it's one of the top GST/HST threads to pop on a google search. As a new indie/kindle publisher/author I am doing my due diligence on the subject of taxation. I haven't registered as a corporation yet but I will be in the near future.

I wonder what the previous posters in this thread ended up doing since originally posting "way back" in 2012. I did some digging and I found a site where someone had clearly disclosed why we do not have to collect GST/HST on royalty payments - even if you're making more than $30,000 per year, and even if you're selling your digital/createspace books on Amazon.ca. I hope it helps.

This is a direct quote from the another forum --> http://www.writingforums.com/threads/127898-Canadian-Indie-Publishers-Kindle-Smashwords-etc-And-GST

//
This thread is old but I know others are finding it so I would like to answer your question. GST/HST is ONLY required to be collected at a point of sale. Yes, each point of sale. Here is a cut paste from "Guide T4012, T2 Corporation - Income Tax Guide" at http://www.cra-arc.gc.ca/E/pub/gi/gi-065/gi-065-e.pdf (more guides at After you register )

"Example 3
A publisher in Ontario sells an order of historical fiction novels to a wholesaler in Ontario.
The novels are printed books for purposes of the rebate, and therefore, will be qualifying books. Because the rebate will apply to sales at any point in the distribution chain, the publisher will collect only the 5% federal part of the HST and pay or credit the rebate of the 8% provincial" (pg 4 of GST/INFO sheet BC/Ontario link as above)

as an indie publisher pvt corporation (which is what I have) or indie sole proprietor OR a self published author (who does not have a company) you are not involved in a point of sale when you agree with amazon to have your intellectual property sold by them in ebook or (through createspace) a POD paperback they print up. You are receiving ROYALTIES from them. In amazon.ca a book that sales for $10 of yours will be collected by amazon.ca and they will give you roughly 70% (depending on pricing and other things I wont get into here) and they keep the 30% AND they charge the customer the tax. THEY are the first point of sale and tax has to be collected.

Now if you eventually go ahead in the manner of a traditional publisher and print up your own books and you sell to a local book wholesaler (who distributes to bookstores etc) and you get paid THAT is a point of sale and you collect tax from them. That situation is the example above from Revenue Canada's publication.

You simply tell them in plain English and referring to the publication (and others --do a search on the cra website Canada Revenue Agency Web site -- Site Web de l'Agence du revenu du Canada) the discrepancy is because your business both sells some books directly (ie if you have an online store or an ebay store where you sell some ebooks or printed out books of yours yourself) AND collect royalties from business entities like amazon who are using your copyrights via a contractual agreement of author to publisher (royalty payments) when they, the contracted party, SELL one of your items. Since THEY(amazon etc)are involved at the only point of sale they are required from the customers to collect the tax and send it in.

What is confusing for many new indie publishers is that they think of amazon etc as a customer. They are NOT your customer (like a book wholesaler would be to you in the above CRA example or a bookbuyer buying from your store). Rather you are in a legal contractual agreement for profit sharing with amazon (etc) over your intellectual properties (copyrights) and since they handle the only point of sale the onus is on them to collect the tax (and they do). Amazon.COM does this too (they have a gst number for canada).

For you to pay hst that happens only when you directly sell an item thru your store OR to a distributor and HE PAYS YOU up front (a point of sale) for you to ship him some books. You charge them hst for that point of sale. Then they turn around, up the price, and sell it to the bookbuyer and collect hst (a 2nd point of sale, notice its not double taxing because its not the same point of sale!).//


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