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Question For Canadians About GST

by LeapingHorse
8 replies
Hey guys - I'm wondering how GST works for affiliates. As a business owner, I believe you have to pay GST after $30,000 in income. However, as an affiliate who isn't actually selling a product, I assume this isn't the case?

Can someone with experience in this please comment.

Thanks!
#canadians #gst #question
  • Profile picture of the author LeapingHorse
    Thanks for the reply.

    So as an affiliate I consider myself self-employed. And I do claim expenses. However, since my income as an affiliate is based on commissions, I don't have to pay GST to the government - is that correct?
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  • Profile picture of the author francof
    You only charge to customers / give GST to the government on sales to businesses / individuals located in Canada. As an affiliate you're not really selling anything to anyone, you're just making a commission, the business you're an affiliate of is doing the selling.
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  • Profile picture of the author JonMills
    Originally Posted by LeapingHorse View Post

    Hey guys - I'm wondering how GST works for affiliates. As a business owner, I believe you have to pay GST after $30,000 in income. However, as an affiliate who isn't actually selling a product, I assume this isn't the case?

    Can someone with experience in this please comment.

    Thanks!
    Im based in canada, and an affiliate

    If all your income, coming in from USA and Canada amounts to more than $30,000 you have to have a GST number even though the income from the USA is class as zero gst and you may not ever have to charge GST to anyone if your dealing with anything outside of Canada..

    By law above $30,000 total income you must have a GST number. So the only GST you would submit would be the ones originating from canadian dealings

    Also GST means at the end of the year you can if you want claim back GSt you have spent on items you bought. You have to send in the paper work at the end of the year i think its before april, if you dealt with

    Now income tax is another thing you have to pay that on all income ( any countries you make money from)

    The issues you may encounter is if you are doing affiliate marketing for a Canadian company, in the eyes of the tax man you are still providing a service ( GOODS AND SERVICE TAX ) to them and so you would need to charge them GST. I kid you not that is what I was told by someone from GST as I explained my business to them years ago.

    I deal with American companies and not Canadian for affiliate marketing anyway so avoid running into that issue

    As for selling digital products such as software and that, go through clickbank and they collect and submit the GST for you, as basically they are buying from you at wholesale price at the moment of sale and they are based in the states. Clickbank is the ones responsible for collection of GST

    If you end up selling digital products outside of clickbank just keep a portion of it aside or collect it through your cart.

    Next year it will get even more confusing when they come in with harmonized tax.

    Again though im not an accountant so dont quote me on any of the above, its not legal advice your best to chat to an accountant.

    Overall its still a very grey area but they are clamping down big time on online businesses
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    • Profile picture of the author TheAtHomeCouple
      Originally Posted by JonMills View Post

      Im based in canada, and an affiliate

      If all your income, coming in from USA and Canada amounts to more than $30,000 you have to have a GST number even though the income from the USA is class as zero gst and you may not ever have to charge GST to anyone if your dealing with anything outside of Canada..

      By law above $30,000 total income you must have a GST number. So the only GST you would submit would be the ones originating from canadian dealings

      Also GST means at the end of the year you can if you want claim back GSt you have spent on items you bought. You have to send in the paper work at the end of the year i think its before april, if you dealt with

      Now income tax is another thing you have to pay that on all income ( any countries you make money from)

      The issues you may encounter is if you are doing affiliate marketing for a Canadian company, in the eyes of the tax man you are still providing a service ( GOODS AND SERVICE TAX ) to them and so you would need to charge them GST. I kid you not that is what I was told by someone from GST as I explained my business to them years ago.

      I deal with American companies and not Canadian for affiliate marketing anyway so avoid running into that issue

      As for selling digital products such as software and that, go through clickbank and they collect and submit the GST for you, as basically they are buying from you at wholesale price at the moment of sale and they are based in the states. Clickbank is the ones responsible for collection of GST

      If you end up selling digital products outside of clickbank just keep a portion of it aside or collect it through your cart.

      Next year it will get even more confusing when they come in with harmonized tax.

      Again though im not an accountant so dont quote me on any of the above, its not legal advice your best to chat to an accountant.

      Overall its still a very grey area but they are clamping down big time on online businesses
      Wow.. Jon, that was killer. lol, you've explained more about being self employed and how taxes work than any .gc.ca website I've encountered over my last 12 months of being at home affiliate/freelancing.

      Cheers.
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      • Profile picture of the author exiledone1
        Okay, what If I live in Canada and I'm the vendor of the product I'm selling on clickbank? Do I still need a GST number when I hit the 30,000 mark?

        How does that work when I'm a clickbank vendor based in Canada?

        My jv partner who is using the clickbank jv contracts is in America though and we split everything 50%
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    • Profile picture of the author Mike Hill
      Originally Posted by JonMills View Post

      Im based in canada, and an affiliate

      If all your income, coming in from USA and Canada amounts to more than $30,000 you have to have a GST number even though the income from the USA is class as zero gst and you may not ever have to charge GST to anyone if your dealing with anything outside of Canada..

      By law above $30,000 total income you must have a GST number. So the only GST you would submit would be the ones originating from canadian dealings

      Also GST means at the end of the year you can if you want claim back GSt you have spent on items you bought. You have to send in the paper work at the end of the year i think its before april, if you dealt with

      Now income tax is another thing you have to pay that on all income ( any countries you make money from)

      The issues you may encounter is if you are doing affiliate marketing for a Canadian company, in the eyes of the tax man you are still providing a service ( GOODS AND SERVICE TAX ) to them and so you would need to charge them GST. I kid you not that is what I was told by someone from GST as I explained my business to them years ago.

      I deal with American companies and not Canadian for affiliate marketing anyway so avoid running into that issue

      As for selling digital products such as software and that, go through clickbank and they collect and submit the GST for you, as basically they are buying from you at wholesale price at the moment of sale and they are based in the states. Clickbank is the ones responsible for collection of GST

      If you end up selling digital products outside of clickbank just keep a portion of it aside or collect it through your cart.

      Next year it will get even more confusing when they come in with harmonized tax.

      Again though im not an accountant so dont quote me on any of the above, its not legal advice your best to chat to an accountant.

      Overall its still a very grey area but they are clamping down big time on online businesses
      Jon you are clearly confused about when you need a GST number... You may not have explained it correctly to the Federal Government when you called about questions regarding a GST number.

      When you sell someone elses product or service why would you have to be responsible for the GST? It is the owner's responsibility. If he is in the USA then so be it. You are just a salesman... You do however have to pay income tax.

      Now if it's your own product or service then yes you will have to collect GST if over $30,000 per year. but not on affiliate products unless it is stated otherwise in the affiliate agreement.
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  • Profile picture of the author francof
    Hi Jon - fellow Canadian eh
    Good explanations - that's kinda messed up about wanting you to charge GST to companies you're affiliate of in Canada... but that is their mentality Most of the people you'll talk with at Revenue Canada don't know anything about online business.

    For HST we already have harmonized sales tax here in New-Brunswick it's not really more confusing with than without, you just charge people / companies in your own province the full harmonized tax rate (currently 13% here) and people in other provinces just the GST.
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  • Profile picture of the author Resale Rights Ninja
    I am still paying PST - and they say that internet tech moves fast....
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