Forum Discussion
Taxes upfront
I've always got $0 phones without paying anything to get it Telus sent me a message saying I can get any $0 phone on a 2 year term for $75month with 10gbs and they will waive my remaining balance fee...
NFtoBC
Community Power User
Community Power UserSomething similar happens with service rebates. The difference is whether you are given a discount, or a rebate. Tax law sees the two as being different. If the sale price is reduced to zero, then you pay no tax. If you get a rebate, say for signing a 2 year contract, that is calculated after the tax is applied. It is confusing, as we see both being the same, but they are different in the eyes of the tax man.
If it helps, think of it like a mail in rebate you can apply at the cash register.
I'm curious as to how the taxes are calculated. A portion of your monthly bill can be attributed to paying for your discounted device. I'm sure that amount is already taxed. If you are being taxed up front for the device discount isn't that applying double tax on the same amounts?
Perhaps the "upfront" part of it is shifting the monthly tax and paying it in advance rather than taxing it twice. I would hope that's what is happening. I never buy my phones on a contract so I've never seen it on my bills.
Taxes is the price of the phone (12%) which you pay upfront, you don't get it tax on finance part of the bill, you do get tax on the $75 rate plan though (9%)
- So at least it's not double taxed. I suspect CRA audited and told TELUS to submit full taxes on delivery of the product.
