How to file taxes based on Amazon tax reports, in Canada with GST and QST?
Hi im wondering if anyone has a solution for this. The way we do it now requires endless amount of EXCEL work, we download the tax report and then sort it by tax type and then add it up seperately, although it never works 100 properly, since for some reason the tax report dates are always different than the payment report dates. Very annoying!! ive tried numerous programs, but they all get confused because of the different tax types. id appreciate anyones help on this one!!
How to file taxes based on Amazon tax reports, in Canada with GST and QST?
Hi im wondering if anyone has a solution for this. The way we do it now requires endless amount of EXCEL work, we download the tax report and then sort it by tax type and then add it up seperately, although it never works 100 properly, since for some reason the tax report dates are always different than the payment report dates. Very annoying!! ive tried numerous programs, but they all get confused because of the different tax types. id appreciate anyones help on this one!!
78 replies
Seller_X9AxWaXfNnGAl
The first question is, do you know how to use Excel “filters”? If not, learn that now. It is not hard, but will save you a lot of time. Pivot tables are even better, but they require more work.
You can filter for each tax type and then use the total for each monthly report to accumulate your sales information for your filing.
To determine your expenses, you will need to use your other sources for non-Amazon. That should include invoices and bills you have received for product purchases. It become more complicated if you use FBA since there are monthly invoices that Amazon emails to you to identify the GST/HST paid for FBA. There is also QST paid since September. These can be deducted from what you will pay.
I suggest that you keep your thinking for your Payments files separate from your sales tax filing. Those are inputs for your accounting, but you won’t use those directly for your sales tax filings. Don’t try to reconcile these together. One is monthly and the other is usually bi-weekly. They do not line up.
Dave
Seller_6yNudEHAC4Jzr
We use spreadsheets as well because the big US based accounting software companies’ Canadian packages treat FX and ITC/Rs as an afterthought leading to countless workarounds, especially with cross border transactions.
I can tell you that for the purposes of commodity (sales) taxes, it is the date of sale that is required for the reports, not the date of payment. In fact, the taxes are due regardless of whether you are actually paid for the sale.
Seller_6yNudEHAC4Jzr
There is an issue on a small percentage of orders where Amazon charges the customer the tax on the notional value of free shipping and then takes the tax back out of the Seller’s balance upon refund. But only in a very small number of cases.
Seller_G5QNskmtEbYeR
Wow first time I’ve ever seen so much action on this issue which is a huge flaw and could be made much simpler by Amazon (in my opinion). We also use QB and sell through multiple channels in both US and CAD. For Amazon Canada we do both FBA and Merchant fulfilled. It is one persons job to print the reports and then create a summary invoice which matches the payments, breaks down the total quantity and revenue per sku and taxes (federal vs. 1 province). It’s a job but we’ve have not been able to find anything more reliable and i’m sure that this can be programmed…
FYI we’ve tried the excel sheets with the help of experts and continuously find them to be flawed especially when dealing with multiple Canadian tax zones, income, Amazon commissions and so on. Why hasn’t anyone created the ultimate Amazon to QB Canada integration? WHY?
Seller_BXHkF0elemiSo
It doesn’t seem as if Amazon will be fixing this flaw anytime soon. We had to take matters into our own hands.
To recap, if you collect sales taxes with more than one jurisdiction and sell FBM you cannot rely on the settlement report or the Tax Document Library. This is because the settlement report just says ‘tax’ without breaking down the tax-type and the Tax Document Library does not record refunds for FBM.
Until now, we would manually review all refunds to properly record sales tax, but this was very tedious because even on the Order Detail page it doesn’t show the tax breakdown.
I went ahead and wrote a simple program that reads the data from both the settlement report and Tax Document Library to calculate the correct amounts.
It does this by looking at all refunds and it then checks the original taxes collected on the order and allocates the correct portions to the correct tax. The program then provides a list of the entries needed for QB which we enter on one sales invoice like this:
Total Sales
Total Shipping
Total Amazon Fees
Total Refunds
Total Shipping Refunds
Total Amazon Fees Refunded
MISC credits/fees
And then we enter in the net tax calculated.
Takes 5 minutes every 2 weeks instead of 5 hours.
Seller_5OJ6mdRBsUbUN
Hi, may I ask a question?
I am a seller in ON and already registered for GHS/HST. Do I also need to register for PST and QST?
Thanks
Seller_5OJ6mdRBsUbUN
Hi, Dave,
As far as I understand, GST/HST reported to CRA= sales tax from Amazon minus GST/HST from your expenses
Am I right?
Thanks
Seller_6yNudEHAC4Jzr
Example:
Widget 1 (POSRNS) $100 - 5% GST
Widget 2 (HSTNS) $100 - 15% HST + $2 EHF Fee
Widget 3 (Z) $100 - 0% GST/HST
Shipping $10 + 6 2/3% HST based on price
Or Shipping $10 + 4.23252352% HST based on weight
Or Shipping $10 + 8.23235255% HST based on volumetric weight
If you have accounting software that is calculating this correctly then I’m in, but it ain’t QB.
Seller_BXHkF0elemiSo
So it seems Amazon has made some progress. The Tax Document Library report now shows the tax break-down of refunds of Merchant Fulfilled Orders.
As you can see from this thread, it used to only show the break-down for FBA orders.
However…it is not yet perfect. It only shows if the order was fully refunded. If you issued a partial refund (shipping, restocking fees etc) it is NOT on the report.
So, essentially the report is not yet reliable. Unless you always issue 100% refunds.
