I’ve noticed a change to Apple Trade-In policies in Canada. In the past, when I received a trade-in refund, it consisted of the promised trade-in value plus tax. The effect was that I only paid tax on the net cost of the device, not the full retail price.
This year I only received the promised trade-in value, meaning that I paid tax on the full cost of the device. I spoke with several people at Apple, and no one was able to provide an explanation of this change.
Here is an example, using round numbers and a figure of 10% sales tax.
In the past, the process looked like this:
I’m curious about this because I’m pretty sure that Canadian tax law only allows retailers to charge tax on the net value after trade-in.
Thanks for your help!
This year I only received the promised trade-in value, meaning that I paid tax on the full cost of the device. I spoke with several people at Apple, and no one was able to provide an explanation of this change.
Here is an example, using round numbers and a figure of 10% sales tax.
In the past, the process looked like this:
- If a new iPhone cost $1000, and my trade-in was valued at $500, I paid $1100 up front ($1000 plus 10% tax). When the trade-in was processed, I received $550 in refund ($500 plus 10% tax). My net cost was $550.
- If a new iPhone cost $1000, and my trade-in was valued at $500, I paid $1100 up front ($1000 plus 10% tax). When the trade-in was processed, I received $500 in refund. My net cost was $600.
I’m curious about this because I’m pretty sure that Canadian tax law only allows retailers to charge tax on the net value after trade-in.
Thanks for your help!