It is important for sellers when selling online to be aware of the risks faced from not being compliant with international VAT.

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Top Tips on International Tax for Online Sellers 15/10/2014
www.meridianglobalservices.com

2. FOR ONLINE SELLERS :
It is important for sellers when selling online to be
aware of the risks faced from not being compliant
with international VAT.
Find out the 8 top tips for online sellers here

3. #1 Know what VAT is and how it applies to
your cross border sales
Goods imported into a country from
another jurisdiction are subject to VAT.
Depending on your cross border business
activities, your company may need to VAT
register for VAT in an overseas jurisdiction,
collect VAT and remit this to overseas tax
authorities.
Take the time to consider if this applies to
your business.

4. #2 Don’t lose out on recovering your import VAT
If you ship stock in bulk (or are considering this) either yourself
or via a fulfilment partner, you will be charged import VAT on
the goods as they enter the country.
This can be removed if handled correctly so don’t let it be a
sunken cost.

5. #3 Know the Distance Selling Thresholds for the
Countries Where You Sell
Distance selling is when a seller sells goods at a distance (e.g.,
over the internet, by telephone, by mail order) and delivers
them from one EU Member State to customers (private
individuals) in other EU Member States.
Each EU Member State has a distance selling threshold
ranging between €35,000 and €100,000.
When a seller exceeds this turnover threshold in another EU
Member State, they will have a liability to VAT register there
and charge the relative local VAT rate on their sales.

6. #4 Know the Correct VAT Rates for the Countries
Where you Sell
VAT rates across EU Member States
can differ widely from those in the
sellers’ country.
Distance sellers must apply the
correct VAT rate on sales in other EU
Member States. Make sure you
know the right rate.

7. #5 ‘Private’ Sellers on eBay, Amazon etc. Can Be
Liable for VAT Too
With the boom in online sales, the number of private
individuals selling items online has increased.
As these sellers do not consider themselves to be
companies, many do not take into consideration their
potential VAT registration liability in any country.
International taxation authorities now require many
private sellers to account for VAT in their country due to
the volume of sales and the way in which products are
displayed and described. If in doubt, better to have it
checked it out.

8. #6 Make Your Web-Store VAT Friendly
Since the seller’s website is the platform used for online
sales, it is essential that it is set up for international e-commerce.
This means that it must be capable of showing different
currencies and the VAT rate to be applied on the
goods.
Better still, before a consumer purchases good, the full
selling pricing, including VAT, packaging and
transportation should be shown clearly before placing
the order.

9. #7 Make the Purchase VAT Friendly
If you ship direct from North America, your
customer is often forced to pay the tax to
the end courier.
This causes a lot of angst with customers as
the price paid and the perceived saving is
eroded and it causes high levels of returns.
Stop to think if it makes sense from a business
and customer point of view for you to
voluntarily account for VAT.

10. #8 VAT Register from Dollar One if You Sell
Digital Services
Companies that sell digital services to
overseas customers (EU, CH, and Norway)
are responsible to account for VAT on the
prices paid by the end customer.
This means that if your business supplies
services electronically to private overseas
individuals, you need to make sure you are
complying with your overseas VAT liabilities.

11. For more information about our organisation,
please visit www.meridianglobalservices.com
Meridian Global Services, Tallaght Business Park, Tallaght, Dublin 24, Ireland.
Tel: +353 (0)1 4590 500 | Fax: +353 (0)1 4590 540
© 2014 Meridian Global Services.
Published in Ireland. All rights reserved.