Canadian tax department may start to audit eBay PowerSellers as soon as this fall. It's just something that's waiting to happen since the Federal Courts of Canada has denied eBay's appeal to disclose 2004 and 2005 PowerSeller information and those whose sales hit at least US$1,000 per month with effect from 7th November, 2008.
Knowing that many eBay sellers would be affected by this, the Canadian IRS has allowed grace period for these sellers who have been under the radar so far to come forward to straighten their tax matters before the IRS starts their audit on them. Coming clean, they would avoid getting penalized. At least they have had ample warning!
So if you are a Canadian citizen or tax-paying resident and selling online, on eBay or otherwise, awarded with PowerSeller status or not, you should make sure that your income tax and GST returns match your ecommerce activities, particularly on eBay. You don't want to get entangled in law!
Knowing that many eBay sellers would be affected by this, the Canadian IRS has allowed grace period for these sellers who have been under the radar so far to come forward to straighten their tax matters before the IRS starts their audit on them. Coming clean, they would avoid getting penalized. At least they have had ample warning!
So if you are a Canadian citizen or tax-paying resident and selling online, on eBay or otherwise, awarded with PowerSeller status or not, you should make sure that your income tax and GST returns match your ecommerce activities, particularly on eBay. You don't want to get entangled in law!
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