Angus Kidman17 October 2008, 6:02 PM
Think you can get away with selling a bunch of stuff at eBay and then not declaring the income to the Australian Taxation Office? Think again.
eBay has recently contacted members with high sales volumes (more than $50,000 worth of goods in the 2006 or 2007 financial years, or $75,000 worth in 2008) to inform them that the ATO has requested information about those sellers — a likely prelude both to checking if the members in question have declared that income for taxation purposes, and to auditing anyone with a massive discrepancy in declared income and cash pouring in from the auction site. "We confirm that disclosure has now been made to the ATO as legally required," the message (which has reproduced on a number of discussion boards (and reported in the Sydney Morning Herald) notes. Similar blitzes have been carried out by the ATO in previous years.
In discussion threads on eBay's forum, many sellers have suggested that rising eBay fees and brand damage from this year's PayPal fiasco have made selling on the site far less profitable. Of course, if they're no longer making a massive profit, or any profit at all, then they have nothing to fear from an ATO investigation in any case, but not all eBay sellers are thorough about keeping records.
An additional source of confusion for many eBay sellers is the complex GST rules which apply to using the site. Private individuals selling goods don't have to register for or consider GST, but anyone who sells more goods than the GST registration threshold — currently $75,000 — do. "Sellers who are listing using the auction format and that are required to charge GST will need to set aside 1/11th of the final value for GST purposes," eBay's FAQ points out.
Some sellers are worried that helping tech-clueless friends and family sell on the site might have caused GST problems. "If I sold a motorbike for a mate on eBay, would the dreaded GST come in to play on this particular item?" one seller wrote. "I'm not sure if I'm up 'that'' creek without a paddle." Ironically, eBay itself does not pay GST, as its business is registered in that well-known tax haven, Switzerland.
None of this is likely to matter much if all you've done is sell the occasional unwanted item on eBay (though that income should be included on your tax return). However, it demonstrates that the "good old days" of treating income earned online as entirely separate from day-to-day financial considerations are well and truly gone.