Global Taxes

TLC

New Member
#1
I'm pretty confused about taxes. My dropship store is a registered business in Bulgaria, and I ship worldwide. While shipping is free and easy, taxes are not. Am I correct that I should charge the Bulgarian 20% tax rate on all orders regardless of where the product is shipping to in the world?

If not... since I'm just starting out and haven't made profits yet, is there an automated tax calculating plugin that is either free or very inexpensive? It will probably take me some months to make my first sale, and I'm trying to keep startup costs down.

Lastly, is it sufficient to put notification in my Terms and Conditions page under the Shipping Title that all products will arrive as International packages and may incur additional customs charges which are the customer's responsibility?

Thanks very much.
 

Sunster

Active Member
#2
I'm pretty confused about taxes. My dropship store is a registered business in Bulgaria, and I ship worldwide. While shipping is free and easy, taxes are not. Am I correct that I should charge the Bulgarian 20% tax rate on all orders regardless of where the product is shipping to in the world?

If not... since I'm just starting out and haven't made profits yet, is there an automated tax calculating plugin that is either free or very inexpensive? It will probably take me some months to make my first sale, and I'm trying to keep startup costs down.

Lastly, is it sufficient to put notification in my Terms and Conditions page under the Shipping Title that all products will arrive as International packages and may incur additional customs charges which are the customer's responsibility?

Thanks very much.
You really should look into the tax laws of Bulgaria or speak to an accountant. If you get your info online, you should double and triple verify it. Normally you would charge tax in country and no tax out of country. Also you may only be required to start charging tax after a certain amount of revenue. Either way just plug them in to Woocommerce and it will take care of the rest, no plugin needed really.

And it's definetly ok and best practive to put that customs disclaimer on your site.




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TLC

New Member
#3
Thank you. That's what I thought. No sales in Bulgaria, no taxes... but with the EU being a single economic zone, it's pretty confusing.

Yes, I'm looking for an English speaking accountant now.

Thanks again.
 

Sunster

Active Member
#5
You can contact your supplier and have him declare the product at a price lower than the tax price. Goods will not be taxed.





my skype is :arno1270
my aliexpress store:https://marcatsafactory.aliexpress.com/store/4291054
if you have any things,please contact me
And how is this supposed to help the op? SERIOUSLY? If you didn't understand the question then fine but if this was a bad attempt of just plugging your store then it was a major FACEPALM.




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#6
And how is this supposed to help the op? SERIOUSLY? If you didn't understand the question then fine but if this was a bad attempt of just plugging your store then it was a major FACEPALM.




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For example, if a customer purchases a product for $100, the supplier can declare $10, so that the customer will pay a small tariff, which requires the customer to contact the supplier.Let suppliers help you modify the declared value. I just give you an opinion.You can make your own choice.
 

Sunster

Active Member
#7
For example, if a customer purchases a product for $100, the supplier can declare $10, so that the customer will pay a small tariff, which requires the customer to contact the supplier.Let suppliers help you modify the declared value. I just give you an opinion.You can make your own choice.
You still don't understand the op's question. AND your suggestion to scam customs by altering the declared value can also get your packages delayed, confiscated etc because it is illegal/fraud. Do people do this everyday...yes but that's a whole different subject and again....NOT what the op asked about.




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#8
You still don't understand the op's question. AND your suggestion to scam customs by altering the declared value can also get your packages delayed, confiscated etc because it is illegal/fraud. Do people do this everyday...yes but that's a whole different subject and again....NOT what the op asked about.




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ok,so sorry,i am don't know
 

Mar

Moderator
#9
Lastly, is it sufficient to put notification in my Terms and Conditions page under the Shipping Title that all products will arrive as International packages and may incur additional customs charges which are the customer's responsibility?
It is a common knowledge that customs charges are buyers responsibility. It is more than sufficient if you add it in your Terms and Conditions.
 
#10
Contact Your local Bulgarnian tax office or however it's called. I think you must only pay the 20% IF you overcome a signicant amount of sales to Bulgaria (not other countries).
 
#11
I actually have almost the same question, so please pardon me for asking again from the perspective of my shop: My company is based in Thailand (we only have 7% VAT/GST) and my tax consultant in Bangkok tells me that I don´t need to charge any taxes outside of Thailand. But another Tax consultant in Germany tells me that all orders sent to the EU are subject of the VAT rate of the respective country where the buyer resides. A rule of thumb in Germany used to be that import duty equals VAT rate which is 16% in Germany and e.g. 20% in Bulgaria (as stated in the above). Italy, France - every EU country has a different VAT rate. Not to mention The USA with all its Federal States and respective taxes. How do you deal with all these countries and states´ taxes? I mean you can't really register for a tax ID in every country where you make a sale, correct?
 

Mar

Moderator
#12
I actually have almost the same question, so please pardon me for asking again from the perspective of my shop: My company is based in Thailand (we only have 7% VAT/GST) and my tax consultant in Bangkok tells me that I don´t need to charge any taxes outside of Thailand. But another Tax consultant in Germany tells me that all orders sent to the EU are subject of the VAT rate of the respective country where the buyer resides. A rule of thumb in Germany used to be that import duty equals VAT rate which is 16% in Germany and e.g. 20% in Bulgaria (as stated in the above). Italy, France - every EU country has a different VAT rate. Not to mention The USA with all its Federal States and respective taxes. How do you deal with all these countries and states´ taxes? I mean you can't really register for a tax ID in every country where you make a sale, correct?
You pay tax in your country where your business is based. Your customer will take care of taxes in his/her country. It's common sense, how can you pay tax in a country you don't live?
 
#13
You pay tax in your country where your business is based. Your customer will take care of taxes in his/her country. It's common sense, how can you pay tax in a country you don't live?
Well, please let me polish up your common sense then: According to the German Tax authorities (who play on EU rules just as any other country) it´s not as simple as you think. As a shipper/seller, YOU as a seller are responsible as well. All prices must state the government tax included. They must state the respective tax at the endpoint when you target end consumers and not do B2B. Means: If you sell to an end consumer in Bulgaria, your shopping cart has to show up the respective VAT plus the respective import tax per good (eg. garments mostly have an extra import tax in the same value as the country´s VAT, so its -eg Germany: 16% import tax + 16% VAT for a boxer shorts made in China). If you include taxes in your price, you must a) state them and b) pass the VAT to the authorities. In order to do so as a trading company, you need to obtain a TaxID in at least one EU country (spoken for EU trades now). If you decide to play it easy and don´t do an official tax registration in the country where you sell goods, there are a couple of things you should keep in mind:
As per Import tax: In case A buyer rejects the parcel due to the fact that she/he has to pay import tax the EU customer rights for end consumers (END consumers) apply. Means: A buyer can reclaim his/her payment (which is pretty easy via PayPal or credit cards) and your parcel is stuck in customs in eg. Italy and it´s your duty to get it away there because after 2 weeks storage fees and other fees apply. apart from that, there is a customs blacklist and you don´t want your company on it.
Don´t get me wrong: Dropshipping is a great thing! But in order to propel the Alibaba traders base that helps to sell Chinese goods to western markets, it would be very helpful to clarify the tax issue. At another place, I already asked for an update of the AliExpress plugin that passes not only the estimated delivery times but also certifies the kind of the good so it´s easy to auto-generate taxes and duties for the online shop system. I´d be happy to pay for that feature so I can make sure that my shops run tax-safe if I really integrate the AliExpress resources to it.
 
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Mar

Moderator
#14
Well, please let me polish up your common sense then: According to the German Tax authorities (who play on EU rules just as any other country) it´s not as simple as you think. As a shipper/seller, YOU as a seller are responsible as well. All prices must state the government tax included. They must state the respective tax at the endpoint when you target end consumers and not do B2B. Means: If you sell to an end consumer in Bulgaria, your shopping cart has to show up the respective VAT plus the respective import tax per good (eg. garments mostly have an extra import tax in the same value as the country´s VAT, so its -eg Germany: 16% import tax + 16% VAT for a boxer shorts made in China). If you include taxes in your price, you must a) state them and b) pass the VAT to the authorities. In order to do so as a trading company, you need to obtain a TaxID in at least one EU country (spoken for EU trades now). If you decide to play it easy and don´t do an official tax registration in the country where you sell goods, there are a couple of things you should keep in mind:
As per Import tax: In case A buyer rejects the parcel due to the fact that she/he has to pay import tax the EU customer rights for end consumers (END consumers) apply. Means: A buyer can reclaim his/her payment (which is pretty easy via PayPal or credit cards) and your parcel is stuck in customs in eg. Italy and it´s your duty to get it away there because after 2 weeks storage fees and other fees apply. apart from that, there is a customs blacklist and you don´t want your company on it.
Don´t get me wrong: Dropshipping is a great thing! But in order to propel the Alibaba traders base that helps to sell Chinese goods to western markets, it would be very helpful to clarify the tax issue. At another place, I already asked for an update of the AliExpress plugin that passes not only the estimated delivery times but also certifies the kind of the good so it´s easy to auto-generate taxes and duties for the online shop system. I´d be happy to pay for that feature so I can make sure that my shops run tax-safe if I really integrate the AliExpress resources to it.
If you don't change the default Shipping & Delivery information of your site it clearly stated:
What about customs?
We are not responsible for any custom fees once the items have shipped. By purchasing our products, you consent that one or more packages may be shipped to you and may get custom fees when they arrive to your country.

Talking about common sense, that is what we call common sense. Do not complicate matters, don't make something out of nothing.
 
#15
I agree with Mar. You have to pay business taxes to the country where your business is registered. So charge your countries rate. However, in Bulgaria, you are not required to charge VAT until you make over 50,000 lev in sales. So check if there is a rule like that in Thailand (or your country) as well.
 
#16
If you don't change the default Shipping & Delivery information of your site it clearly stated:
What about customs?
We are not responsible for any custom fees once the items have shipped. By purchasing our products, you consent that one or more packages may be shipped to you and may get custom fees when they arrive to your country.

Talking about common sense, that is what we call common sense. Do not complicate matters, don't make something out of nothing.
Actually this answer is what I expected. Thanks anyway.