Listed and sold in 2 days at Spaceship (17.Viewing)

I ran a little experiment and moves a number of my domains to spaceship with BIN and LTO settings.

I did that 2 days ago and got my first sale from it today on a MapleWord.ca.

I usually quoted 5k for similar domains but at 10% spaceship takes a chunk to circumvent this I listed at 6k instead.

The issue on .CA domains is the client usually wants to pay in CAD so getting it in USD was a pleasant surprise and the $5,400 ended up being $7,522 CAD when all was said and done.

I assume there is no HST on the transaction but that opens up a whole new discussion brought up by @rlm

Because the domain is actually sold in USD out of country and then back in I assume there are no sales taxes due. (hope)

So nice surprise after a 2 day shift to Spaceship.

MapleDots said:

I assume there is no HST on the transaction but that opens up a whole new discussion brought up by [ATTACH type="full" alt="rlm"]10269[/ATTACH] @rlm

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That topic on the sales tax is here: Godaddy - tax evasion?

MapleDots said:

Because the domain is actually sold in USD out of country and then back in I assume there are no sales taxes due. (hope)

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Here's the rule: If you are selling through a 3rd-party but know it's a Canadian buyer (the marketplace has told you or you have the customer's address or phone) then you have to charge the appropriate tax and work that into your sales price. If not, and no level of customer contact info or residency is provided, then no tax is expected or due.

DomainRecap said:

Here's the rule: If you are selling through a 3rd-party but know it's a Canadian buyer (the marketplace has told you or you have the customer's address or phone) then you have to charge the appropriate tax and work that into your sales price. If not, and no level of customer contact info or residency is provided, then no tax is expected or due.

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And Spaceship does not disclose that info, I have a name and that is it, no contact info is provided.

I assume that answeres @rlm issue above as well.

MapleDots said:

And Spaceship does not disclose that info, I have a name and that is it, no contact info is provided.

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Then you're clear.

I've always assumed a .ca domain sale has to be to a person or business that has a Canadian presence, so that would default to gst in any .ca sale, because they would have to have some attachment or address in Canada where the domain would be used?

Is there an exception in that if you sell a .ca domain on a marketplace, and they give you no info on the buyer, then gst is exempt?

MapleDots said:

I ran a little experiment and moves a number of my domains to spaceship with BIN and LTO settings.

I did that 2 days ago and got my first sale from it today on a MapleWord.ca.

I usually quoted 5k for similar domains but at 10% spaceship takes a chunk to circumvent this I listed at 6k instead.

The issue on .CA domains is the client usually wants to pay in CAD so getting it in USD was a pleasant surprise and the $5,400 ended up being $7,522 CAD when all was said and done.

I assume there is no HST on the transaction but that opens up a whole new discussion brought up by @rlm

Because the domain is actually sold in USD out of country and then back in I assume there are no sales taxes due. (hope)

So nice surprise after a 2 day shift to Spaceship.

Click to expand...

Well done, a nice BIN sale so quick after just listing. Did this name get a lot of interest in the past?

domains said:

Well done, a nice BIN sale so quick after just listing. Did this name get a lot of interest in the past?

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Yes, I quoted 2.5k 3 times in the last two years and highest offer was 1k

I think having BIN makes a big difference in sales, I won't second guess it because I got 7.5k CAD from BIN

As a supplier, you are ultimately responsible for tax obligations. No way around that.

So the best way to handle it is this: You need to clearly state the buyer's broker IS the buyer and you invoice the broker directly stating this clearly, along with the broker's billing address and treat the taxation correctly for that address. Make no reference to the end-buyer. This is the only sure way to protect yourself. You've handled your obligation as a seller and collected tax if it was due. If the broker lies about what they do, that is on them. But you've handled your obligation by invoicing the broker as the buyer.

Otherwise, for brokers that are willing, you can demand the buyer's billing address for taxation purposes as a condition of closing.

If brokers aren't willing to do either, walk away.

My comments were in regards to domain marketplaces like Afternic, Atom, Spaceship, etc. who will all tell you they are the buyer and have no Canadian tax ID and have no requirement to collect Canadian taxes. I know, I've asked.

So I posed this scenario to the CRA and they agreed, up to the point where you do not know the identity of the potential end user. If you do know and they are Canadian, then you are required to collect tax. No need for specific details like addresses or business tax IDs, you just need to collect and remit tax as a generic "Canadian buyer" and adjust the invoice total to separate the tax. You can't add it on, since you are are dealing with a non-taxed, lump sum payment from a non-Canadian source, so the invoice needs to be adjusted to reflect tax collected (i.e. you take the tax off the top - in ON your $10,000 sale suddenly becomes $8,850 with $1150 in HST).

If the end user info/country is not disclosed, then it's determined to be a Non-Canadian Buyer with no tax requirement.

So basically, there is a little "but" in there if you knowingly provide goods or services to a Canadian person or entity, using a non-taxable, non-Canadian marketplace, then you need to adjust your invoice for tax and remit the tax.

I got a name from Spaceship but nothing else, not even a flag beside the name. So basically I could not charge the tax even if I wanted too.

Secondly, it's Spaceship that is depositing the funds in my account not the end user so again the tax issue is obscured.

MapleDots said:

I got a name from Spaceship but nothing else, not even a flag beside the name. So basically I could not charge the tax even if I wanted too.

Secondly, it's Spaceship that is depositing the funds in my account not the end user so again the tax issue is obscured.

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Exactly my point, there is no way to formally charge tax using your Business Tax ID, which is why (if you know it's a Canadian end user) you need to charge general tax and adjust the tax on your payout. I explained it all above.

If you sell a domain for $10.000 to Spaceship and they tell you it's a Canadian buyer, then you would adjust your invoice to state $8,850 proceeds with $1150 in HST, then remit (or just note it as a Tax Input Credit) $1150 as HST/tax.

Or you could just add 13% to your offer, if you knew in advance and try to get $11,300 out of them, stating you have to remit HST.

It's all reporting at that point, not actually charging the buyer, because you can't charge the buyer. But the CRA would still like the tax if you know it's a Canadian end user.