GST/HST on Adsense? (Canadians)

[m0rtal]

Umm so I've always charged GST to networks who had offices in Canada but it never occurred to me that Adsense could potentially fall under the same category since Google does have offices here.

Thing is their Adsense division could still be a separate entity and in that case GST would not apply.

I can not find any info on this other than mixed views from people - nothing official from Google. I would think that they would be on top of this and would simplify it by automatically adding it in so they don't have thousands of publishers submitting GST invoices if in fact they should be paying it.

What concerns me is I came across a post where someone who was getting audited was seeking the same info because the CRA was saying they should have been collecting.

This becomes a bigger issue once HST rolls in since essentially if you get audited years down the road you will be on the hook for 13%. Any one have any solid info on this? I do not want to e-mail those creatures.

Keep comments like "I don't charge any networks GST and I haven't been for years, you don't have to!" to yourself please =)

 

[markus]

Aren't you supposed to be charging anyways? if your income is over 30k (I'm sure it is) you're supposed to pay gst one way or another. Not sure... look at this

Essentially if you operate a sole proprietorship, a partnership, or a corporation that has gross sales over $30,000 in a fiscal year you are required to collect GST on behalf of the federal government. If your sales are less than $30,000 you can still charge and collect GST.

Demystifying the GST

 

[Spliffic]

If you are Canadian and are working with Canadian networks then you should be charging GST. Good question about adsense though, however since G is based out of the States (are the cheques they're cutting US based?), you may not need to charge.

 

[ncmedia]

^ Correct.

I don't do anything with Canadian CO's, thus don't collect GST, networks/commission based earnings included.

 

[m0rtal]

If you are Canadian and are working with Canadian networks then you should be charging GST. Good question about adsense though, however since G is based out of the States (are the cheques they're cutting US based?), you may not need to charge.

Yeah the first I know and have been doing since the beginning. I know G is based out of the states but they have offices in Canada as well which is what makes me think you would have to charge them as well. Where the cheques come from is rather irrelevant.

If the Adsense part is a totally separate entity then it would make sense you don't have to if they don't have any Adsense related offices up here.

^ Correct.

I don't do anything with Canadian CO's, thus don't collect GST, networks/commission based earnings included.

That wasn't really my question...regardless if you work with networks that have any presence in Canada - whether they are US based or not, as long as they have offices in Canada you should be charging.

e.g. Mediatrust / Advaliant but again that's not what I"m asking here because that's a given, Adsense is a little more complicated and surprisingly there seems to be close to zero information on this topic. You'd think G would throw it in a faq somewhere..

 

[ncmedia]

At the end of the day, I don't think you can charge, or add hst/gst on your invoices to G, unless they are specifically hiring you for freelance work, in Canadian dollars, from their Canadian offices. I do think it's relevant where the checks are being sent from, what currency they are being sent in, and what setup you have with them re adsense comm based income vs. direct contact work.

Where do you write your invoices? How are you charging G for services?

 

[DirSP]

Lets ask the simplest question: Do google charge Canadian GST/HST for advertising on adword? They don't so there is nothing to pass on for Google to pay GST out to you, or in this case, they are not a Canadian company. Otherwise Google would be coughing out that 5% or 14% for GST to pay for Canadian Adsense publishers. Btw, the CRA sucks at answering this type of question. The lower customer support has no idea.

 

[m0rtal]

At the end of the day, I don't think you can charge, or add hst/gst on your invoices to G, unless they are specifically hiring you for freelance work, in Canadian dollars, from their Canadian offices. I do think it's relevant where the checks are being sent from, what currency they are being sent in, and what setup you have with them re adsense comm based income vs. direct contact work.

Where do you write your invoices? How are you charging G for services?

Well, essentially you are providing a service to Google. By running their ads on your site to generate revenue for them you are providing an advertising service. Similar to how it would work with a CPA network. I can pretty much guarantee you if you call CRA and ask them whether you should be charging GST on this revenue the convo will go something like this:

CRA: Do you provide them with a service?
You: Uhh I'm not sure...I place their ads on my site and I make money on them and so does G.
CRA: Ok so you provide advertising services to G. Do they have offices in Canada?
You: Yes
CRA: Ok great, 5% are belong to us!! (or 13% depending on province and soon in ON)

I don't write them any invoices...it just never crossed my mind that you may have to collect on it which is why I made the thread because I'm just not sure.

I do however either provide invoices to networks with a Canadian presence or they send me 5% extra on every payment (they have my GST # of course).

Why I say where the cheque is coming from is irrelevant because, well it is. If for example a company has the majority of their company in Canada and just have a payment office in the US, why would they not be liable for GST? Then everyone would be doing that. It's kinda like setting up a corp off shore to evade taxes. Currency makes no difference either since you can pay out in whatever currency you want as long as you do proper conversion.

 

[m0rtal]

Lets ask the simplest question: Do google charge Canadian GST/HST for advertising on adword? They don't so there is nothing to pass on for Google to pay GST out to you, or in this case, they are not a Canadian company. Otherwise Google would be coughing out that 5% or 14% for GST to pay for Canadian Adsense publishers. Btw, the CRA sucks at answering this type of question. The lower customer support has no idea.

I was just posting when you posted...

You're right that makes perfect sense. But again I think it comes down to whether these are separate entities or not. Like Adwords, Adsense, Google search divisions might be 3 separate entities. And if the Adsense division has no presence in Canada then you would not have to collect GST. However, if all of these 3 are under 1 roof then technically a) you would have to charge them GST on Adsense rev and b) they would have to charge you GST on Adwords spend since they do have a presence here (3 offices) http://www.google.com/corporate/address.html

I think I'll call one of those tomorrow see if they can be of any help..

 

[ncmedia]

Mortal, I just noticed you're in Toronto. Reach out if you want my accountant and tax advisers #'s, they do a great job for me and answer most of this stuff fairly easily, and are well worth the $ (especially the tax adviser) every year.

N.

 

[DirSP]

I was just posting when you posted...

You're right that makes perfect sense. But again I think it comes down to whether these are separate entities or not. Like Adwords, Adsense, Google search divisions might be 3 separate entities. And if the Adsense division has no presence in Canada then you would not have to collect GST. However, if all of these 3 are under 1 roof then technically a) you would have to charge them GST on Adsense rev and b) they would have to charge you GST on Adwords spend since they do have a presence here (3 offices) Corporate Information - Google Offices

I think I'll call one of those tomorrow see if they can be of any help..

Customer service is different though.

 

[m0rtal]

Mortal, I just noticed you're in Toronto. Reach out if you want my accountant and tax advisers #'s, they do a great job for me and answer most of this stuff fairly easily, and are well worth the $ (especially the tax adviser) every year.

N.

I've got a decent one, thanks for the offer though. It's not so much the accountant on this one as they can only go so far by what you tell them. In this case I'm pretty sure they'd say you just have to charge because of the reasons I mentioned...or not charge but if it's a separate entity which you'd have to figure out anyway.

Customer service is different though.

Not sure what you mean? Those offices? Who knows what purpose they serve really..