Canadian based sponsors - paying out hst to canadian affiliates
 

I'm in Ontario and work mostly with a company in the US, but I do have some dating sponsors that are located here in Toronto as well. (successfulmatch, ashleymadison,..)

My hst claim is being audited and I've learned that I need to be collecting hst from my Ontario sponsors - 13% on top of the commission that they are paying me. (The sponsors can claim all of it back as it's an expense.)

So, do any affiliates here have experience with charging their sponsors for hst?

Sponsors - when an affiliate invoices you for hst because you're both canadian or in-province, do you pay up? Is it business as usual or is this something you would object to?

Thanks for your insights!

I assume you know this but you only have to pay HST if the total revenue from canadian sponsors is more than 30k.

That's what I thought too, but my auditor informed me that it's not quite that simple.

I have a registered hst number because I want to claim all the hst I pay on my expenses (freelancers, office rent, etc.) And apparently, if you have an hst number and are using it to claim the hst back, you ALSO have to remit hst on all of your applicable earnings (ie. canadian) even if below the 30,000.00. (which mine are).

Basically, you can't submit an hst claim without also remitting hst when applicable, regardless of the total amount!

So what you said is true, but not if you have registered for a number and are claiming hst from your expenses.

good luck.

not really my area of expertise here but why would it be the sponsors obligation to pay their affiliates taxes for them?

Actually...if they are a CDN based company...paying a cdn based affiliate.

they need to be paying hst
i never work with cdn companies so i havent had to charge this.
However when doing consulting work before for a cdn company they paid me the hst, because they knew they had to.

i predict a boatload of audits soon :)

i think CRA is going after online businesses already. They like the low hanging fruit while the big guys fuck them all the way to bank. Way it fucking goes..

We pay both GST and PST (As we don't have HST in Quebec) for commissions paid to our Canadian affiliates but they need invoice us separately for it.

That pretty much sums it up. If your canadian sponsor does not want to pay the taxes then maybe you should revise your choice of sponsor. :2 cents:

audits for who?

Ok, so the canadian sponsors need to pay hst to their canadian affiliates.

Today I contacted one of my canadian sponsors to inquire about this. All he said was:
"Never heard this before and ive a lot of Ontario partners." Nothing more.

So what do you think is the best way to go about this? I'm thinking of letting each of them know that I have to start invoicing them for the hst, then send invoices once I've got the commissions.

To be honest, I don't see any of them complying with this. And if they don't pay the hst they owe, then it's probably something that has to go to claims court. .. And once it goes to court the business relationship is pretty much destroyed. Can't win?

Starting to think the solution is to simply avoid working with canadian sponsors, but that's a bit like shooting myself in the foot.

there is no reason for them not to comply, it's paid back by the government

Thanks Kenny B, that's good to hear and what I was hoping for! Thanks Phoenix and for the replies of others as well.

And yes, Jman, I gotta definitely rethink my sponsors if they won't pay. One of them I really want to keep though because they have the uber specific niches I need. Unless anyone else has a whitelabel database for horse lovers dating? haha

Exactly Richard. But unfortunately the response I got from one Toronto based dating company was basically akin to - huh? whatcha mean?

CrakRevenue has a message to Canadian affiliates saying to invoice them for GST/HST.

are you talking to a rep? i'd ask to speak with management or an accountant

Vice President of Sales.

sigh i totally asked for that too

Correct, that is how we work it with the our Canadian affiliates that charge the tax, once they receive their commission check they send me an invoice for the taxes.

Not sure why any Canadian company would have issue paying the taxes, we get them back.

I know, right? I guess I'll find out which of these sponsors is running a legit business, and which are trying to avoid what they consider to be a hassle.

they're not going to be in business long lol

Ok, one last question on this, and maybe one of you from Crak can answer. If the canadian sponsor is paying me in USD, should I invoice for my 13% hst in USD as well, or convert it to canadian for them? What do your affiliates do?

HST is zero sum, the Canadian sponsor isn't losing any money.

This is exactly what we do too. We are based in Ontario, so it's the HST applicable here. We were audited for GST a few years ago, and we were fully compliant.