Ecommerce and Taxes

[bijan_sha]

Hi,
2 questions regarding taxes. I appreciate your answers:
1- I sell cellular handsets online. I'm from Ontario, Canada and the tax rate here is 14% (7% provincial 7% federal). What happens if a customer from British Columbia buys a handset from me? His provincial rate is different than mine.
2- I use paypal. Does paypal tell the Canada Revenue Agency how much revenue I had?
Regards, Bijan Shahrokhi

[demosfen]

It probably doesn't, but it may not stay that way forever. Right now Canada Revenue Agency probably can't subpoena Paypal records, since Paypal is out of reach to Canadian court. However, a future treaty between US and Canada could change it and then they could access old records... They are working on something called Security and Prosperity agreement that will eventually make it possible

I think you have some sort of Tax ID in Canada, did you provide it when you opened Paypal account? That's how taxman finds your records. If you are concerned about your privacy, you can open another Paypal account without providing Tax ID. It would be a bigger challenge for government agencies to find it (I'm not sure if you can have a premier Paypal account without it)

The main thing is that when you open a paypal account, you agree to their "privacy policy", which really should be called "no-privacy policy". I think it's a joke on their part, like a guy I went to school with, we called him Schwarzenegger because he was short and skinny. You can never be 100% sure who they will give your information to.