Topic 'Re: Potential NetFlix Tax' in forum 'Canadian Broadband' - dslreports.com

Re: Potential NetFlix Tax

Wed, 25 Jan 2017 18:19:21 EDT

tpiazrule posted : I expected that kind of response. You can believe whatever makes you sleep better at night. I will say that, IMHO, it's an incredibly naiive way of thought but to each their own.

Re: Potential NetFlix Tax

Wed, 25 Jan 2017 17:31:53 EDT

AJ102 posted :

said by tpiazrule:

VPN's are most definitely not bullet-proof and thinking they are as secure as you do, especially to government agencies, is unbelievably naiive. Nothing you do online, from the time you boot up your pc to the time you logoff, is safe.

I don't think you fully understand how VPNs work. The end-to-end encryption of a VPN is actually pretty secure. I doubt even the NSA could crack it if you are using a reasonable encryption levels. Your ISP and any government surveillance monitoring your internet connection can tell that you are using a VPN, where it terminates (IP address), and how much traffic is flowing, but they can't read the traffic. That makes it easy for a government (or ISP) to ban the use of VPNs.

The real vulnerability is that you have no control over the security of the server where your VPN terminates. At that end your traffic is decrypted, and anyone with access to that server can intercept it. However that may be difficult if the server is in another country, and the VPN company that operates the server is in a third country.

Of course VPN software could be defective, or your own computer could be infected with a back door, but that's hardly a given.

Re: Potential NetFlix Tax

Wed, 25 Jan 2017 13:45:27 EDT

tpiazrule posted :

said by AJ102:

If governments want to apply an internet tax, their best bet remains to go after individual major companies like Netflix that offer the low-hanging fruit. That would have to be done through a multi-national agreement, such as the agreements through which certain countries now exchange tax information. But that would likely drive people to use evasive measures, so it would turn into a cat-and-mouse game.

No, this does not work because:

1. No such multinational agreement would ever be reached
2. They have no authority to do so.

VPN's are most definitely not bullet-proof and thinking they are as secure as you do, especially to government agencies, is unbelievably naiive. Nothing you do online, from the time you boot up your pc to the time you logoff, is safe. You could spend all the time and effort in the world and it would be literally meaningless and useless.

The simplest thing to do if they truly want to enforce this is to enforce it on those that are within their jurisdiction. The small fraction of people that actually use financial counter-measures would be insignificant as 99% of the population just simply order Netflix and like services and pay with their credit card/paypal.

Going after a company like Netflix is a waste of money and time and people upset with Netflix that are breaking the law themselves by not remitting this tax have 0 right to do so as they are actually MORE culpable and, in reality, the only ones culpable in this situation.

Re: Potential NetFlix Tax

Wed, 25 Jan 2017 12:50:59 EDT

AJ102 posted :

said by tpiazrule:

They don't need to ban VPN's, all they have to do is track your finances (as they would do during an audit). However they don't even need to go that far. Likewise, if you think using a VPN stops the government from seeing what you are doing, you're, simply put, quite daft.

In fact it is possible to hide what you're doing on the internet by using a VPN. VPNs do have some vulnerabilities, but the easiest thing for a repressive government to do is to ban them entirely since they can at least detect that you are using a VPN. Trying to pry into the traffic on individual VPNs would be impractical on a broad scale.

As for enforcement of restrictions through payment systems, people routinely evade such problems when they do things like subscribing to U.S.-only streaming services like Hulu. Sure it would be possible to have a massive surveillance crackdown to stop most of that, but the effort, cost, and backlash against it would make it an unreasonable method of enforcing an internet tax.

If governments want to apply an internet tax, their best bet remains to go after individual major companies like Netflix that offer the low-hanging fruit. That would have to be done through a multi-national agreement, such as the agreements through which certain countries now exchange tax information. But that would likely drive people to use evasive measures, so it would turn into a cat-and-mouse game.

Re: Potential NetFlix Tax

Wed, 25 Jan 2017 12:18:43 EDT

Lothario posted : Why do you have to pay HST on a used car? The tax was already paid on the original purchase?

Re: Potential NetFlix Tax

Wed, 25 Jan 2017 12:17:31 EDT

Lothario posted : Not every province has HST.

Re: Potential NetFlix Tax

Wed, 25 Jan 2017 11:56:09 EDT

tpiazrule posted : I'm not wishing for anything. I'm telling you that if you think you can hide on the internet you're, simply put, daft and deserve a good reality check. They don't need to ban VPN's, all they have to do is track your finances (as they would do during an audit). However they don't even need to go that far. Likewise, if you think using a VPN stops the government from seeing what you are doing, you're, simply put, quite daft.

NOTHING YOU DO ONLINE IS SAFE. It's time people start realizing this fact and that they have absolutely no privacy online. That is just the reality we live in today.

As for the GST, I don't know if you're old enough to remember when it was introduced, but it was presented as a temporary measure and was only supposed to be in existance for 4 years. I cannot find a link during a quick google search at work right now, but will look tonight when I get home and find it for you.

Re: Potential NetFlix Tax

Wed, 25 Jan 2017 11:28:02 EDT

AJ102 posted : GST or HST was never intended to be temporary. It's a Value-Added Tax (VAT), which governments worldwide have decided is more fair, more economically progressive, and easier to administer than other forms of sales tax. One feature of such a tax is that when a company sells their end product or service outside the country, they get to claim back the tax they have paid on the inputs, and don't have to collect tax from the end customer since they are out of the country. That's not a loophole - exports are considered to be good for the country overall.

As for the government watching for tax evaders on the internet, you would have to start by banning VPNs, as the repressive government of China has just done. Be careful what you wish for.

Re: Potential NetFlix Tax

Wed, 25 Jan 2017 07:00:32 EDT

tpiazrule posted : Like I said, there is a plethora of ways for them to discover what you are doing. Your statement just goes to strengthen that.

The GST should no longer even exist, it was put forth as a temporary measure. However, that being said, it is here, we are legally obligated to pay it and remit it for our purchases where the entity in question does not do so.

People have no right getting upset with Netflix because they are refusing to be a tax mule for the Canadian government when they, themselves are doing the same thing. The difference is that Netflix has no requirement to collect and remit this tax whereas the Canadian population as a whole very much is legally required to pay it.

Today, the government doesn't have to drive around in vans to detect tax evaders, there is a very nice electronic trail and scores of data warehouses housing everything you do online. From the time you login to your computer to the time you logoff, everything you do is tracked.

Re: Potential NetFlix Tax

Wed, 25 Jan 2017 01:41:04 EDT

AJ102 posted : In Britain they've had a TV tax for decades that all TV owners have to pay for the right to receive OTH broadcasts. The government would send out RF detection vans to cruise the streets and pick up TVs operating illegally in homes that hadn't paid the TV tax. Remind you of anything in this thread?

Re: Potential NetFlix Tax

Tue, 24 Jan 2017 17:31:59 EDT

tpiazrule posted : I'm OK with online subscription services doing this, sure. If you really think they can't find this information from other means, you're incredibly naiive.

Nothing you do online is safe.

Re: Potential NetFlix Tax

Tue, 24 Jan 2017 16:23:08 EDT

AsherN posted : You're OK with companies just handing over their client lists to the Government? Just WOW.

Re: Potential NetFlix Tax

Tue, 24 Jan 2017 15:51:43 EDT

TuxFan posted : What happens if I buy an e-book, unavailable on the Canadian market from a Swiss publisher? What if I make a payment to a Russian site to watch a KHL game? What if a Canadian mineral exploration company buys topological data for Morocco? Are the Swiss publisher, the Moscow-based owner of the KHL streaming rights and the Moroccan government required to collect taxes on behalf of the Canadian government?

In all of these cases, the user would be making a payment from Canada, to a foreign company, in order to use the Internet to access data that is being hosted abroad. The only reason our government is attacking Netflix is due to their popularity.

Re: Potential NetFlix Tax

Tue, 24 Jan 2017 15:23:34 EDT

tpiazrule posted : OK, so I guess that won't work. lol

Re: Potential NetFlix Tax

Tue, 24 Jan 2017 15:21:55 EDT

Fergless posted : I remember that hearing vividly. Quite the girl that stood up to Blaise.

Re: Potential NetFlix Tax

Tue, 24 Jan 2017 13:54:56 EDT

Guspaz posted : The government already ordered (not asked) Netflix to hand over subscriber data. Netflix already refused, citing competitively sensitive information. There were no consequences for that refusal.

Re: Potential NetFlix Tax

Tue, 24 Jan 2017 12:46:30 EDT

tpiazrule posted :

said by AJ102:

said by tpiazrule:

With the exception that when it's a subscription service it's laughably easy to track and charge, especially for well-known services like Netflix.

Really? And how do you propose they do that? Require Netflix to hand over their Canadian subscriber list? Oh wait, Netflix has no legal presence in Canada and our government has no jurisdiction to force them.

But let's say they found a way. So now we'll create a new government department whose job is to search the internet globally to discover every company that might be selling services to Canadians, and force them to hand over information? Hmmm, that's a lot of countries, some of them not so friendly as the United States.

If they did introduce such a tax, I would evade it easily - our family current pays for a family Netflix account (4 simultaneous streams) in the country where it is cheapest in local currency and is not taxed. Those family members who live in Canada are allowed to stream the same content as any Netflix Canada account. All allowed within the Netflix rules. The Canadian government would have no reason to know anything about it.

And what if the service is something like web hosting, offered by a U.S. company on a U.S.-based server, paid for by you in Canada? Should that be taxed? Why? No part of it is in Canada.

It's easy to demand simplistic action, not so simple to consider all the implications. You might call that "Trump disease".

It's as simple as asking Netflix for that list. I don't see why Netflix would refuse to hand it over. This causes no extra overhead for netflix, requires extremely little effort and then they are showing that they are being cooperative with the government, without requiring them to become a tax mule and accountant for the Canadian government.

There is no need to create a whole new department, there's departments in place.

I also never said anything about EVERY organization out there, simply the KNOWN entities. The law is meant to cover all but the government doesn't have to force all to comply, it can pick and chose which ones it investigates.

This is far simpler to do than you make it out to be. There is no need to change any laws nor a need to create any new departments.

Of course, the government could also, when it performs an audit on an individual, see what sub services they have paid for via their credit cards or direct payment from their bank accounts and simply ding them at the audit for back GST owed.

This mechanism also exists already.

It really isn't all that complicated. It is a hell of a lot less complicated than trying to create some new law that they have 0 way of enforcing anyways.

This is the Canadian Government's responsibility to enforce and collect. It is also our obligation to report and remit.

Trying to place the burden on a foreign entity is just laziness.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 23:21:48 EDT

InvalidError posted : The Canadian government could very well change the banking and credit laws to require that banks and equivalents collect taxes on payments to companies who do not collect them.

Most people aren't going to bother with currency exchanges and back-channels beyond Canadian influence to avoid taxes. Depending on how you go about completing the end-to-end transaction, middlemen fees may also exceed applicable taxes.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 20:22:13 EDT

AJ102 posted :

said by tpiazrule:

With the exception that when it's a subscription service it's laughably easy to track and charge, especially for well-known services like Netflix.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 20:16:20 EDT

tpiazrule posted : With the exception that when it's a subscription service it's laughably easy to track and charge, especially for well-known services like Netflix.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 20:12:57 EDT

AJ102 posted :

said by tpiazrule:

I still don't understand why they just don't enforce the more applicable law--the one that applies to it's own citizens.

Perhaps the people that live in HST provinces have already forgotten this, but under provincial law in the provinces with PST like BC, individuals who order goods from outside of the province are supposed to self-report and remit PST. The provincial government has no legal jurisdiction to enforce PST collection on retailers with no presence in the province. In other words, if I order a computer part from a mail-order store in Ontario or Alberta, they don't collect any provincial tax from me. I'm supposed to report my purchase and remit PST to the BC provincial government, but that's so unlikely that I'm not even sure they have a mechanism for it.

It's the exact same situation on a provincial scale, and it's been like that for decades.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 19:22:17 EDT

tpiazrule posted : I still don't understand why they just don't enforce the more applicable law--the one that applies to it's own citizens.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 15:28:43 EDT

AJ102 posted : I think we can all understand the frustration that Eug is trying to express that a company like Netflix can appear to have a substantial Canadian operation and yet not have a legal presence here for tax purposes. But this is far from a simple issue, and that's why we have laws and lawyers to argue and judges to interpret those laws to work out all the convolutions and consequences. In the law, and in reality, the result is crystal clear. Netflix does not have a legal presence in Canada, and cannot be forced to pay tax here unless an entirely new category of law is created. That's what the argument is really about: governments everywhere are increasingly concerned about the amount of commerce that flows over the internet and is not easy to monitor and tax. They just call it a "Netflix tax" for short, but what they really mean is "Internet tax".

But think about the implications of that.

Eug refers to Netflix licencing Canadian shows to stream to Canadians, but the reality is that most of the material that Netflix licences for showing in Canada is not Canadian, it comes from other countries. So Netflix is a U.S. corporation, with no offices in Canada, and from some U.S. outfit like CBS they bought the rights to stream some some TV show to a group of countries that happens to include Canada. They allow Canadians to subscribe to their U.S.-based internet streaming service, and to stream those shows for which they have licenced streaming rights for Canada, most of which are not Canadian shows. On what basis exactly are you taxing them in Canada, even if you could since they have no legal corporate presence in Canada?

What you would have to do is invent a new law that says that non-material internet data flows having any assignable value will somehow be monitored and taxed. If you don't pay the tax, it will be blocked. So now you have the government being required to monitor all internet traffic, and be prepared to block it if they deem that some tax has not been paid. Does that sound like a good idea?

This is internet policy commentator Michael Geist's take on it: »www.michaelgeist.ca/2017 ··· les-tax/

"the issue was examined as part of the recent initiative of the G20 and the Organisation for Economic Co-operation and Development to address what is known as “base erosion and profit shifting”, or BEPS.
...
at the present time, the most effective and efficient approach to ensure the appropriate collection of VAT/GST on cross-border business-to-consumer supplies is to require the non-resident supplier to register and account for VAT/GST in the jurisdiction of the consumer—essentially, the usual residence of the customer." (they were looking specifically at the question of digital supply)

In other words, the OECD endorses the solution favoured by Eug. However in the case of the internet this is an unenforceable voluntary measure under current law and technical regimes. Thank goodness, because it would be an export-killing administrative nightmare for my company.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 14:50:11 EDT

tpiazrule posted :

said by Eug:

Don't be obtuse. You know exactly what I mean. I think it should be a nationwide law that forces companies like Netflix to collect the taxes at the source. Because if we don't do this, you just get a couple of guys paying a grand total of a few hundred bucks of taxes out of say $30 million, which is totally pointless.

I'm not being obtuse at all, the fact that you don't like it doesn't mean you're not in the wrong.

You're doing the opposite of being supportive and just whining because someone isn't doing the work that you are legally obligated to do.

You have absolutely 0 right to complain or be upset with anyone as you are just as culpable in this situation as anyone.

The fact is there is a nationwide law requiring every Canadian citizen remit GST on goods/services purchase where the entity in question does not collect this tax.

The simpler and far easier thing to do is to get a list of subs from that entity and direct bill those legally required to pay that money.

I fail to understand why you are upset with Netflix but are completely OK not doing what you are legally required to do. Very hypocritical, IMHO. If you refuse to do what you are legally required to do then why do you expect a foreign entity to do something they are NOT legally required to do?

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 14:44:04 EDT

Eug posted : Don't be obtuse. You know exactly what I mean. I think it should be a nationwide law that forces companies like Netflix to collect the taxes at the source. Because if we don't do this, you just get a couple of guys paying a grand total of a few hundred bucks of taxes out of say $30 million, which is totally pointless.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 14:42:54 EDT

tpiazrule posted :

said by Eug:

No I have not. I feel this should be a nationwide law, not just 3 guys remitting $10 worth of taxes, because that would be pointless.

And yeah, I will say encouraging people to submit tax on their own for stuff like this is a totally useless method of collecting taxes.

It is a nationwide law, every Canadian is required to do this by law.

So NO, you do not support the Canadian government in their efforts whatsoever. So you have no right to chastise anyone or any company as you are just as much in the wrong as they are.

Why do you have a different standard, as a Canadian citizen who lives here and benefits from those tax dollars collected, as some foreign entity? The loss is the same whether the money comes from each individual or one entity. The difference is, there are systems in place to enforce Canadians to pay the tax whereas there is no possible mechanism to enforce a foreign entity to collect and remit it for the government.

All the government needs to do is request a list of subscribers from netflix and then send you the bill.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 14:39:02 EDT

Eug posted : No I have not. I feel this should be a nationwide law, not just 3 guys remitting $10 worth of taxes, because that would be pointless.

And yeah, I will say encouraging people to submit tax on their own for stuff like this is a totally useless method of collecting taxes.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 14:37:49 EDT

tpiazrule posted : [bquote=Eug
In your opinion. ie. You're throwing up your hands because you are convinced nothing can be done.

No, not at all. I proposed a much easier, simpler and an actual feasible solution:

[bquote=tpiazrule
Bottom line is, the only real solution is to enforce the law on Canadians that they remit the tax for their online purchases.

And I'll repeat:

And on your part, if you feel that strongly about it, have you remitted the GST that you are legally obligated to submit on behalf of your netflix subscription?

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 14:37:03 EDT

Eug posted :

said by tpiazrule:

Bottom line is, the only real solution is to enforce the law on Canadians that they remit the tax for their online purchases. There is absolutely nothing they can do to enforce entities with no presence in Canada to be their tax mule for them.

In your opinion. ie. You're throwing up your hands because you are convinced nothing can be done.

I on the other hand, support the government's efforts to study this further. This type of 2-tier system of broadcasting in Canada must be addressed going forward.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 14:34:48 EDT

tpiazrule posted : I've never given my opinion one way or the other on whether I feel they should or not. Personally I don't really give a damn

And on your part, if you feel that strongly about it, have you remitted the GST that you are legally obligated to submit on behalf of your netflix subscription?

If not, you're just as much a part of the issue as everyone else. In your own words, you aren't doing anything and have no idea what to do.

Bottom line is, the only real solution is to enforce the law on Canadians that they remit the tax for their online purchases. There is absolutely nothing they can do to enforce entities with no presence in Canada to be their tax mule for them.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 14:29:53 EDT

Eug posted :

said by tpiazrule:

And I reiterated my statement because you keep insisting "they" claim to have no presence in Canada, when "they" aren't the ones making the claim. By Canada's own definition, "we" are the ones saying "they" don't have a presence in Canada. Netflix is simply doing nothing. They aren't making any claims, they aren't paying any taxes and they don't have to do any such thing because they don't have a presence in Canada. WE tell them this.

And there is no way to enforce it which is why the law is the way it is. At least now you seem to realize that much.

Unlike you, I'm not willing to just throw my hands up in despair. They government is studying this, as they should. Even though I am a Netflix customer, I feel that Netflix deserves to be taxed, and I support efforts to try to make this happen.

BTW, Netflix has been actively trying to resist categorization by the CRTC and the government with their statements in the past. Why do you think that is?

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 14:22:57 EDT

tpiazrule posted : And I reiterated my statement because you keep insisting "they" claim to have no presence in Canada, when "they" aren't the ones making the claim. By Canada's own definition, "we" are the ones saying "they" don't have a presence in Canada. Netflix is simply doing nothing. They aren't making any claims, they aren't paying any taxes and they don't have to do any such thing because they don't have a presence in Canada. WE tell them this.

And there is no way to enforce it which is why the law is the way it is. At least now you seem to realize that much.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 14:18:43 EDT

Eug posted : I am emphasizing the absurdity of it all. There are so many indicators that they have a digital presence in Canada, but they claim they are not, and they can get away with it because of the state of current laws in Canada. I have already said this many times in fact. It's clear they have a strong presence in Canada, but they can claim they do not because outdated definitions and laws in Canada.

As for enforcement, that is an entirely a different discussion, and I don't have all the answers. However, that's why I support the government studying the issue, instead of just proclaiming "It can't be done!" and throwing up our hands like some people in this thread seem to be doing. I could actually see the government working with the big internet service providers in Canada though. You can be pretty damn well sure that Robellus would be willing to consider playing ball.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 12:31:01 EDT

tpiazrule posted :

said by Eug:

said by tpiazrule:

That doesn't answer my question. How do you enforce it?

And by Canada's own definition they have no presence here. It's not Netflix claiming this, it's the Canadian Government.

Again, you are arguing current laws and definitions.

Again, you brought it back up and again, you still have not answered my question about enforcing your new laws and definitions.

said by Eug:

Hell, Netflix in Canada already calls itself "Netflix Canada", charge Canadians subscriptions in Canadian dollars, and have content exclusive to Canada, and have US content which cannot be viewed in Canada, yet they claim that they have no presence in Canada.

That was you, not me.

How would you enforce it? Even if you changed the laws and Netflix refused to pay--how would you force them to do so?

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 12:24:51 EDT

Eug posted :

said by tpiazrule:

That doesn't answer my question. How do you enforce it?

And by Canada's own definition they have no presence here. It's not Netflix claiming this, it's the Canadian Government.

Again, you are arguing current laws and definitions.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 12:08:24 EDT

tpiazrule posted : That doesn't answer my question. How do you enforce it?

And by Canada's own definition they have no presence here. It's not Netflix claiming this, it's the Canadian Government.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 11:35:15 EDT

Eug posted : It would be done at the source. Anyone negotiating agreements to release Canadian licenced digital content to stream Canadian consumers for payment would be collecting taxes. They would be considered to have a digital footprint in Canada.

Hell, Netflix in Canada already calls itself "Netflix Canada", charge Canadians subscriptions in Canadian dollars, and have content exclusive to Canada, and have US content which cannot be viewed in Canada, yet they claim that they have no presence in Canada.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 11:28:08 EDT

tpiazrule posted :

said by Eug:

You keep arguing about current laws. My point is that laws should be changed to reflect modern realities. You may disagree, but repeatedly arguing that current laws don't account for this is entirely missing the point of the argument.

But you're not offering a feasible solution to anything. How would you enforce your new law?

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 11:18:43 EDT

Eug posted : You keep arguing about current laws. My point is that laws should be changed to reflect modern realities. You may disagree, but repeatedly arguing that current laws don't account for this is entirely missing the point of the argument.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 11:08:26 EDT

AJ102 posted :

Eug I'll repeat, it's not like they are just offering Canadians a French subtitle track for Quebec viewers or whatever, for stuff they can legally stream everywhere in the world. That would be closer to that software analogy that AJ outlined (selling software from Canada to another country, but in Spanish). These licencing agreements often do not extend outside of Canada. Just because they have licenced a show for Canada doesn't mean they can stream that show anywhere around the world.

To respond to that specific point, the fact that they are dealing in content licencing agreements for Canada does not in any way imply a Canadian presence for tax purposes. For example you might have a global licence trading company based in the UK that negotiates for content rights in various other countries and then resells those rights to other companies that want to stream to those countries. None of them have a Canadian presence just because they are dealing in Canadian streaming rights.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 10:51:44 EDT

Vomio posted : I think this brings up the problem of policing data and what data is taxable. The potential is there to make law that is possibly worse than the problem, with higher costs than benefits.

If I donate to DSLReports should they/I be taxed for the ability to participate in these forums?

If I read a PDF document on a site from a foreign country, did they just publish something in Canada?

It is a mess and political interference and tax grabbing could effectively become Internet censorship.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 10:51:18 EDT

resa1983 posted :

said by Eug:

Yes, under Canadian law, currently CRA cannot do anything about it, because previous lawmakers could not foresee such a situation happening. However, laws can be changed, and IMO, they should be changed.

Even if laws are changed, nothing can be done. You can't FORCE a foreign company to collect & remit a tax, which has nothing to do with them. Even with a new Canadian law. They're not in Canada, they have nothing to do with Canada. The only thing the gov could attempt to do is contact the foreign company's gov, and them ask nicely to push them to have the company pay up. Which is nonsense, and it would be a "We don't care."
Would you (as an owner) like to be told you have to remit taxes to a foreign gov, despite having no connections yourself to that gov's country? No, and rightfully so.

Under CANADIAN law right now, in these situations, the Canadian who orders the service is to pay the tax directly to CRA.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 10:37:37 EDT

Eug posted :

said by resa1983:

said by Eug:

said by tpiazrule:

That still doesn't mean they have a presence in Canada. They need to have a physical office location in Canada in order for them to be considered as having a presence in Canada.

Like I said, it's a loophole. The law was created long before this was even considered a possible issue.

It's not like they are just offering Canadians a French subtitle track for Quebec viewers or whatever. That would be closer to that software analogy. Furthermore, these licencing agreements often do not extend outside of Canada. Just because they have licenced a show for Canada doesn't mean they can stream that show anywhere around the world.

Its not really a loophole. You can't randomly tax a company from across the globe, who doesn't have a presence in Canada. You can't force them to pay when they have no connection, and no real reason to pay.

And the CRA gets that. That's why under law, you're supposed to remit taxes on the digital/overseas goods yourself to the CRA. But nobody does.

Its not a loophole, theres just no way for CRA to enforce the companies. They can just thumb their noses up at a foreign country, without any ramifications.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 10:34:59 EDT

resa1983 posted :

said by Eug:

said by tpiazrule:

That still doesn't mean they have a presence in Canada. They need to have a physical office location in Canada in order for them to be considered as having a presence in Canada.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 10:30:25 EDT

Eug posted :

said by tpiazrule:

That still doesn't mean they have a presence in Canada. They need to have a physical office location in Canada in order for them to be considered as having a presence in Canada.

Like I said, it's a loophole. The law was created long before this was even considered a possible issue.

I'll repeat, it's not like they are just offering Canadians a French subtitle track for Quebec viewers or whatever, for stuff they can legally stream everywhere in the world. That would be closer to that software analogy that AJ outlined (selling software from Canada to another country, but in Spanish). These licencing agreements often do not extend outside of Canada. Just because they have licenced a show for Canada doesn't mean they can stream that show anywhere around the world.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 10:29:54 EDT

resa1983 posted :

said by Eug:

said by AJ102:

said by Eug:

From a philosophical (but not necessarily legal) point of view:

If they have a specific Canadian lineup of shows that are unique to Canada with specific Canadian licencing agreements, and they do, then they have an digital presence in Canada and should be collecting taxes in Canada

That sounds sensible on the surface, but as you said, that's a philosophical view and not a legal one.

Having a specially tailored offer for Canadians does not amount to having a presence in Canada. We can offer a version of our Canadian software product in Spanish, but that does not equate to us having a presence in Argentina, for example.

If a company has no presence in the country, there is no legal way to collect local taxes from that company. If somebody in Argentina buys our Canadian software product in Spanish over the internet, maybe the government in Argentina would like us to collect a 15% VAT from them and remit it to the government of Argentina. But that's not our legal obligation here in Canada. We leave it up to those foreign customers to voluntarily submit VAT to their own government if they want. We have no legal presence in Argentina or other countries outside of Canada, and no obligation to voluntarily get involved in their tax collection schemes just because their residents buy our product here in Canada and have it delivered over the internet.

See how it gets difficult?

Your analogy is not a very good one. Netflix has specific licencing agreements with Canadian content owners in place in order to gain access to the Canadian market.

It's not just that they are offering Canadians a French subtitle track for Quebec viewers or whatever.

Technically, we all should be remitting HST for our Netflix subscriptions on our own.. But nobody does it.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 10:29:51 EDT

tpiazrule posted :

said by Eug:

said by AJ102:

said by Eug:

That still doesn't mean they have a presence in Canada. They need to have a physical office location in Canada in order for them to be considered as having a presence in Canada.

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 10:24:39 EDT

Eug posted :

said by AJ102:

said by Eug:

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 10:00:46 EDT

AJ102 posted :

said by Eug:

Re: Potential NetFlix Tax

Mon, 23 Jan 2017 09:21:13 EDT

resa1983 posted :

said by Teddy Boom:

said by resa1983:

Honestly, most tax software - whether it be somethign for a Small Business (ie Quickbooks) or something for a large business will have some sort of Tax module, which if you set it up correctly (which really is key), will do the work of filing your HST for you in just a few seconds.

If you know of any book keeping software aware of Quick Method, please let me know :)

Unfortunately when we do quick method, it's done manually. Nothing really does that properly.