GST Accounting with eBay Promotions

LOzBargainUserOne on 02/06/2017 - 09:40
Last edited 02/06/2017 - 09:52 by 1 other user

When eBay have 20% vouchers and the PayPal invoice for an item for say $1700 comes down to $1360 (and this is the amount that gets charged to the company credit card), yet the retailer provides an invoice for $1700 with $154.54 of GST included do you claim the full $154.54 as the GST component in your BAS?

Or do you claim only $1360/11 = $123.64 in GST because this is the amount the card was charged?

To me it makes sense that you claim the GST on the full amount of $1700 because that's what the retailer has sent to the ATO and then treat the eBay voucher as income? Is this eBay voucher/discount of $340 an Input Taxed Supply with no GST?

i.e in Reckon One:

Product A Photography Equipment $1545.46 (net) $154.54 (gst) $1700.00
eBay Voucher Income (input taxed) $340.00 (net) -$340.00
————
$1360.00

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• 

  Baysew on 02/06/2017 - 09:52

  Why not ask question here AMA - Round Two - Tax and Tax Return Questions - Ask Me Anything - GO!

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    OzBargainUserOne on 02/06/2017 - 09:58

    thanks for the heads up. will try them.

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  retiredfeline on 02/06/2017 - 09:59

  I don't know about treating the voucher as income but in previous threads involving TRS, it was affirmed that you get to claim the whole GST because that's what the invoice says. Essentially eBay/vendor is reimbursing part of the GST to you.

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  [Deactivated] on 02/06/2017 - 10:03

  If seller is getting its full $1700, and eBay is providing you with the 20% discount (but I'd be surprised if they are that generous), then, in that case, there are two transactions and you account for them separately as per your final scenario above.

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  minniethemoocher on 02/06/2017 - 10:17

  Technically you can only claim 1/11 GST of the amount you paid for the item regardless of what the invoice says.

  • 

    OzBargainUserOne on 02/06/2017 - 10:56

    Well, the seller did receive the full $1700 and not the discounted price. So that leads me to believe that I can claim the full amount.

    Then I received a credit from ebay.com.au for $340. hence why I think I should treat it as an input taxed sale?

    • 

      minniethemoocher on 02/06/2017 - 14:20

      Regardless you are entitled to claim 1/11th of what you paid. Check with the ATO if you don't believe me.

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  tajid on 02/06/2017 - 10:59

  Get an invoice from them and see what's stated there. You need invoice for tax purposes afterall.

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  OzBargainUserOne on 02/06/2017 - 11:09

  Nicole (nicolemcmilllon) from the AMA linked above stated:
  ~~
  Why would the ebay voucher be input taxed?
  I would only claim the GST that I actually paid regardless of the invoice.
  The discount you get is paid to the company by ebay thats why the full amount of GST remited to the ATO by that company because they receive some of it from you and some of it from ebay.
  Ebay will claim the portion they paid and you should claim the portion you paid.
  ~~

  This makes sense and ebay will/should be claiming GST on the 20% they paid the supplier.
  i.e
  I pay the supplier 80% of the invoice total hence I claim 80% of the GST component on full price.
  eBay pays the supplier 20% of the invoice total hence they claim 20% of the GST component on full price.

  It does contradict/conflict with the TRS scheme where tourists will present the full $1700 invoice and get the full GST reimbursed as the Tax Invoice issued by the supplier shows $1700 being paid from the customer. I guess the ATO will lose out in this instance as eBay will be claiming GST credits where there are none left!

  I understand what Nicole is saying but if treated as 2 separate transactions - which I think is what happens in the background - I think I should be entitled to the full GST credit as I pay the supplier the full amount of $1700 and ebay provides me with a rebate. What would happen if the rebate was provided 3 days later as a separate transaction?

  so confusing!

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  bobbified on 02/06/2017 - 11:24

  I don't care what anyone says about ethics - my claims go by what's on the Tax Invoice (and not what it actually cost me).

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    OzBargainUserOne on 02/06/2017 - 11:58

    I am paying the full amount to the retailer for $1700 and then immediately getting a refund from ebay.com.au for 20% of the value.
    If you treat it like 2 separate transactions that is what happens hence the invoice from the supplier to me for the full amount of $1700.

    If I only claim GST on 80% of the purchase then the supplier should issue me an invoice for only 80% of the value and then issue ebay another invoice for 20% of the value. This is not what happens. The supplier issues me an invoice for $1700 100% (of the value) and has no further dealings with ebay.com.au

    i.e The supplier receives $1700 from me and issues me a tax invoice for $1700.
    ebay.com.au reimburses me 20% of this value. ebay.com.au does not deal with supplier or pays supplier anything nor receives a tax invoice from supplier hence they shouldn't be claiming any GST credits.

    This rebate of 20% appears as income on my statement. EBay can't claim GST credits because they don't receive a tax invoice from the seller.

    That is my argument that I will provide to the ATO. It also explains why under the TRS scheme, they refund the amount shown on the invoice - not the amount you paid less the ebay.com.au discount.

    When receiving the discount from ebay.com.au - I will treat this as a normal taxable supply - I.e similar to issuing a tax invoice for $340 to ebay.com.au which includes $30.91 GST.

    The net result is similar to me only getting a GST refund of $123.64 ($154.54 - $30.91). This is precisely the amount of GST included in the discounted $1360 amount.

    • 

      jjj123 on 08/06/2017 - 09:37

      agree.

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    jjj123 on 08/06/2017 - 09:38

    then you should also record a transaction as an income for the ebay discount and this discount includes gst

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  jjj123 on 08/06/2017 - 09:36

  Have you find an answer?

  My understanding is that ebay still claim gst from ATO for the discount given to you, so after net off, you can only claim discounted portion of the gst.

  It's like a rebate from a supplier, and the rebate contains gst which the supplier can claim back from ato.

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    OzBargainUserOne on 11/06/2017 - 23:02

    +1

    If it's for personal use and you are using the TRS scheme at the airport, you will get back 1/11 of the invoice amount which is the full invoice price from the supplier (without the ebay discount taken out). i.e If your item RRP is $1100 and ebay discount is 20% so you end up paying $880, you will get back $100 from the TRS counter.

    If you buy the item under a company credit card, the amount on the credit card statement will be $880. When you do your BAS, you will get back $80 from the ATO. This is because there are in effect two transactions - 1: you pay $1100 to the supplier and get a tax invoice for $1100 from the supplier and 2: you issue an invoice to ebay.com.au for $220 and they reimburse you (hence why the credit card statement shows $1100 - $220 = $880). The invoice to ebay.com.au includes GST of $20. This is exactly equivalent to the $80 GST you get back from the ATO ($100 GST from supplier - $20 GST from ebay.com.au = $80).

    So it works out to be $20 better if you claim via TRS and can't claim the goods as a legitimate business expense. If you can claim as a business expense, then you will end up saving 30% of $800 (i.e $240 less tax)

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      jjj123 on 11/06/2017 - 23:06

      totally agree