Godaddy - tax evasion? (2.Viewing)

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MapleDots said:
If you're not the guy invoicing then you don't have to worry about the sales tax.

Technically the first broker above is correct, you are selling to godaddy because the buyer gets billed and payment actually goes to godaddy not you. Godaddy then removes the commission and pays you the difference. At no point in time did you have contact with the end user, in fact you don't even know who the end user is.
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That's not brokering. Their valued added service is the broker's services (the commission) only, not the domain. That's also not escrow. When running an escrow business, you are only charging for your value added services (the escrow services), and taxes on that, not the product itself. If doing what you said was true, an american company could buy and resell anything to and from Canadian users, thus allowing the the user to avoid paying taxes.

MapleDots said:
So godaddy should be charging the sales tax if they are billing from within Canada, which they are not because they are charging is US dollars.
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Charging in USD has nothing to do with taxes. Taxes has everything to do with your business location, not your currency. You are still legally obligated to collect/remit equivalent CAD in taxes whether you're billing in CAD, USD, crypto, whatever.

MapleDots said:
Again, the broker above is/was correct
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Not so sure.

MapleDots said:
The situation becomes much more messy when dealing with a Canadian Company like DomainEasy
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Again, every Canadian company would just open a shell company in the US if it was that easy to avoid GST/HST obligations.

MapleDots said:
Screenshot (13).png


With their contact info in Canada taxes would have to be charged by you or domaineasy if the sale was to a Canadian end user.
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Notice godaddy.com/en-ca switches away from the /en-ca as soon as you get to any selling part. The en-ca really only applies when buying new domains, as soon as you go to auctions and such it switches over to straight godaddy.com

In all respects when you list a domain it gets sold by GoDaddy US/Global and not Canada
 
rlm said:
So I had a transaction recently using a godaddy broker where the buyer agreed to pay me the HST due AFTER the completion of the transaction. The godaddy broker got the buyer to agree to this, I trusted him and accepted the deal without taxes, and sure enough, once the transaction completed, he passed on the buyer's details and I invoiced them for the taxes due, and they paid. Although I took a risk assuming the buyer would actually pay it, it worked out, they paid, and I was happy to know that taxes were paid & I'll be remitting them to CRA. And they buyer could use my invoice to claim the HST back as an Input Tax Credit - they way the system is supposed to work. And the buyer then didn't have to pay the godaddy commission on top of the HST too.

However, today I had a different GoDaddy broker tell me that Godaddy would be "buying" the domain (a different domain) from me, and "reselling" it to the buyer. Therefore, I wouldn't charge Godaddy taxes, and that Godaddy would charge taxes due.

I'm not sure I believe that - leaving me potentially liable for taxes. Not to mention, can you even legally call yourself a broker if you're "buying" and then "reselling" ???

For example, if godaddy brokerage is claiming they are a US company and therefore I shouldn't charge them taxes, I sell it to them, then if Godaddy USA then sells the domain to a Canadian, then taxes wouldn't apply again. No taxes paid. However, if I had sold it directly to the buyer, taxes would have been applied. So this whole route by Godaddy seems like tax avoidance - especially because I know they have multiple registered corporations in Canada.

Maybe this is legal, I don't know, but I am suspicious for sure. I'd sure like to hear a real answer from an official godaddy rep / executive. And I'd sure like to start getting the same story from every broker, rather than a different story from every broker.

I've had some success over the years with Godaddy brokers. And although I think its crazy for buyers to pay those commissions, the broker does play a role and sometimes earn their commission by helping convince the buyer its actually worth the price. Sometimes a buyer needs that supposed independent opinion to help convince them. But I'd really like to see a real godaddy response to this tax issue, to settle this once and for all.

jamesiles @jamesiles ?

Thanks.
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Can you send me the domain name via jiles @ godaddy.com? I'm happy to take a look.
 
its not about any individual domain name, its about every domain name that a canadian corporation (like mine) that sells to a Canadian buyer, through godaddy brokers. Canadian goods & services taxes apply and I’m obligated to collect them. Using godaddy brokers makes it nearly impossible to do properly because:

1) I don’t know the buyer snd their billing address, therefore I don’t know which tax rate applies.

2) I have no documentation from Godaddy to state that they are assuming my responsibility as a seller for applying, collecting and remitting those taxes due.
 
Still crickets from godaddy.

My thoughts:

They should really make it clear to both buyers and sellers, exactly what the godaddy role is in every negotiation (buyer vs broker vs seller), and the tax implications for each, prior to negotiations. For example, will their commission be calculated on the pre-tax subtotal or post-tax total? I understand that anonymity might be warranted during negotiations, but in order to complete the sale, billing addresses are required for proper taxation. How can Canadian sellers be GST/HST compliant if they don't know who the buyer is? An NDA should suffice and Godaddy could hand over the buyer's billing details for tax purposes. Or maybe Godaddy could warrant to the seller that Godaddy takes full responsibility for proper taxation and thereby relieves seller from any Canadian GST/HST tax obligations arising from this sale?

GoDaddy is incorporated in Canada and as such, they do charge Canadian buyers taxes for other services such as domain registrations. So another question is, can GoDaddy freely choose to do broker business out of GoDaddy USA to avoid taxation obligations that GoDaddy Canada would have to deal with?

In theory a foreign buyer owes no sales taxes in Canada when buying a domain from a Canadian corporation. However, what if that foreign buyer has an office in Canada? It seems you should have to use your Canadian billing address for tax purposes, assuming you have one. If not, every Canadian corp could run their purchases and sales through a foreign shell company to avoid GST/HST tax obligations.

It just seems to me that a corp the size of Godaddy would readily have all the answers to these questions, and that they would be addressed in every negotiation the same way, and that all brokers would understand godaddy's policies.
 

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