Canada sales tax / Steam gift card

[76561198343950488]

Hi,

I don't use Steam very often, I have bought only one game before using a credit card. My question is about sales tax. My friend has a steam card and he's trying to activate it but it requires an address to collect sales tax. Can someone please explain this to me?

[HLCinSC]

Steam has to cross check your billing info with your location info to determine if they have to collect sales tax from purchases made.

[Skytrill]

Sorry for the huge bump but there is a flaw in these taxes for Steam cards simply because.. we already paid the taxes when the Steam card was bought. Why should we pay the taxes again when buying a game if it was taxed already? If you are paying with a credit card that is understandable but not with a Steam card that already had taxes at the time of purchase.

[Satoru]

Originally posted by Alien91:

Sorry for the huge bump but there is a flaw in these taxes for Steam cards simply because.. we already paid the taxes when the Steam card was bought. Why should we pay the taxes again when buying a game if it was taxed already? If you are paying with a credit card that is understandable but not with a Steam card that already had taxes at the time of purchase.

you dont pay taxes when you purchase the steam cards

You pay taxes when you use them to purchase a game on steam

Taxes (GST/HST) are not charged on steam cards when purchased

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/p-202/gift-certificates.html

Under section 181.2 of the ETA, the issuance or sale of a gift certificate for consideration is deemed not to be a supply and therefore does not attract GST/HST. When the gift certificate is subsequently redeemed, it is treated as consideration or a part thereof for the supply of the property or services. GST/HST may apply at that time depending on the tax status of the supply.

Example 2 – Gift cards
Facts
A GST/HST registered restaurant chain sells gift cards for consideration with the restaurant name and the phrase ''Gift Card'' imprinted on them. A customer purchasing the card chooses a monetary exchange value which is stored electronically on the card. The customer may pay additional amounts to the retailer to have the card topped up or reloaded with any amount at any time. The card may be used to purchase any goods or services at any restaurant of the chain and the amount payable for the purchase is electronically deducted from the balance stored on the gift card. If GST/HST is applicable, the GST/HST is also deducted from the balance. The cards have no intrinsic value.

Issue
Does section 181.2 apply to the gift cards issued by the restaurant chain?

Comments
Section 181.2 applies to the supply of the gift cards. The gift cards meet the conditions outlined above: they have a monetary exchange value stored on the card, they are issued for consideration, they are accepted as consideration for the supply of goods and services, the gift card holder is not required to do anything other than present the card as payment and the card has no intrinsic value. No GST/HST is payable on the issuance of the card. When the card is redeemed, GST/HST, if applicable, is imposed based on the consideration paid for the supply of the goods and services.

[ReBoot]

Originally posted by Alien91:

Sorry for the huge bump but there is a flaw in these taxes for Steam cards simply because.. we already paid the taxes when the Steam card was bought. Why should we pay the taxes again when buying a game if it was taxed already? If you are paying with a credit card that is understandable but not with a Steam card that already had taxes at the time of purchase.

When you buy a, for example, 20€ card, you pay 20€. No tax gets charged.
Now it's possible to pay 50$ for a 40$ card in certain regions, but that's not tax, that's the vendor taking a cut, not tax, meaning VAT still has to be collected.

[rawWwRrr]

Originally posted by Alien91:

we already paid the taxes when the Steam card was bought.

You should not have been charged sales tax on the card. A $20 card should cost $20. If you paid more for it, that's between you and whoever sold you the card.

[Jack Schitt]

I second what HLCinSC shared. It asks for an address so they know if they have to charge tax or not and what the amount of tax they have to charge is. When we use a Steam Card to make a purchase the Steam Store is going to apply our local tax to it. The steam card amount has to be enough to cover the cost of the product being purchased and the sales tax. For example my local tax is 6%. If I were to purchase a game for $19.99 its total cost would be $21.19 including my local tax.
A $20 steam card wouldn't be enough. I'd need a $25 Steam Card.

[rawWwRrr]

Originally posted by Jack Schitt:

I second what HotSauce shared.

I think you're in the wrong in thread.

[Jack Schitt]

Originally posted by rawWwRrr:

Originally posted by Jack Schitt:

I second what HotSauce shared.

I think you're in the wrong in thread.

Not the wrong thread. I typed the wrong name.

[Osiris Phantom]

Originally posted by Alien91:

Sorry for the huge bump but there is a flaw in these taxes for Steam cards simply because.. we already paid the taxes when the Steam card was bought. Why should we pay the taxes again when buying a game if it was taxed already? If you are paying with a credit card that is understandable but not with a Steam card that already had taxes at the time of purchase.

That's what the government already does to peoples money. They tax the money you earn and then tax the same money again when you go to buy something xD. I agree its stupid.