Selling Overseas? Avoid these VAT Mistakes

Alex Lyon from Avask Tax Advisors works with over 2,000 eCommerce and FBA clients. Her role is to help them understand, register for, manage and comply with VAT registrations and payments.

Did you know that when selling online in Europe the taxes (VAT) are included in the purchase price?
Did you know if you don’t increase your list price your margins shrink by the VAT amount?
Did you know that if you have a UK company there is a minimum total revenue threshold amount you can reach before you have to collect VAT?
Did you know the biggest mistake made by US companies is not registering for VAT, but that you can sell on Amazon prior to having the registration number?
If you answered “no” to at least one of the above questions…and plan to expand to Europe, hearing Alex’s explanation of the VAT process could be critical to your expansion success.

Episode Highlights:

- The biggest mistake Alex sees is not registering for VAT, and it is costly!
- You can sell before being registered, but it’ll cost you if you don’t increase your prices to account for VAT.
- You do not have to set up a foreign corporation to sell in Europe, regardless of your overseas location: i.e. US, Singapore, etc.
- You only collect in countries you are shipping from (there is a caveat).
- Amazon does not show VAT charges separately in your seller account.
- The PanEU program makes sense for some, most only register in the UK and Germany.
- If you don’t pay VAT…your Amazon account will be suspended and/or closed (eventually).
- “Import VAT” is charged on the inventory shipped into the country and paid immediately.
- “Sales VAT” is charged on the retail price of your goods, and paid quarterly.
- The UK and Germany are the two largest markets for selling online in the EU.
- The UK is the easiest to expand to from the US because of language and the challenges of shipping to Germany.
- Wiring VAT payments can take 4-5 days and a currency account in Europe shortens the wire times.
- Using an intermediary bank, or currency account, can save 1-3% in exchange rate fees.
- With Avask, the costs to register for VAT in the UK is about $200 USD, and then about $1200 USD per year.
- Caveat to costs: “Distance Selling Thresholds”, if met, require more than $1200 per year because VAT is required in countries you do not store inventory in.

Видео Selling Overseas? Avoid these VAT Mistakes канала Quiet Light Academy