Taxes question

C

chrishurts

New Member
Hello everyone!

I am almost done finishing setting up my first Alidropship web store. There are a few things I'm still confused about and need support. One of them is taxes.

Now, my store will be operating from the EU, so I need help with setting up taxes.

So, my web store is in the EU, the products are in China, and when someone buys something from my store, the product(s) are shipped from China to their country, right? Now, what I'm confused about is who pays VAT to who? Let's say the buyer is from Malta (also EU), buys a product from my store, and it ships from China. Do I charge them VAT on my site, and if so, what do I do with that VAT money because it's obviously not mine? Second, do I charge them VAT based on Malta's VAT laws or my country's VAT laws? Do I charge them VAT at all? What do I do, I'm totally confused.

If I do need to charge them VAT, I should set it up in Settings - Taxes - Tax Settings and Tax Rates. Now, it seems that under Tax Rates, I should manually enter VAT for each country/state in the world. How do you handle this, if this needs to be handled at all?

And one more question. I have a potential buyer from Malta, and she asked how will she pay tax for the product when she orders? What should I tell her?

Can someone please help me with setting this up?

Thank you so much,
Chris
 
daniel-97

daniel-97

Well-Known Member
Well, you won't need to worry about taxes when you first started. As in USA (for example), you only need to charge taxes to the customers when:

- You have 200 orders the previous year
- OR made more than $100,000 the previous year

And for that, you're obligated to charge customers VAT taxes and give them to the IRS (remember to register first), if you charge taxes without IRS permission, you're breaking the law and can be brought to court.

Do a simple Google search like "tax for sellers outside of EU" may bring you some answers you're looking for

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C

chrishurts

New Member
daniel-97 said:
Well, you won't need to worry about taxes when you first started. As in USA (for example), you only need to charge taxes to the customers when:

- You have 200 orders the previous year
- OR made more than $100,000 the previous year
...
Click to expand...

Thank you, Daniel. Does this mean I should leave the tax settings untouched for all countries, and leave it to the Customs to charge taxes? After all, if I would charge taxes to someone who's in another country, who would I then forward these taxes to? o_O
 
daniel-97

daniel-97

Well-Known Member
chrishurts said:
Thank you, Daniel. Does this mean I should leave the tax settings untouched for all countries, and leave it to the Customs to charge taxes? After all, if I would charge taxes to someone who's in another country, who would I then forward these taxes to? o_O
Click to expand...
It means that you should not even turn on taxes unless you reach the point of making a lot of sales.

If you charge taxes, you will have to pay it to the customer’s country’s government. And register for a tax number beforehand
 
Gedinasay

Gedinasay

New Member
In addition, you need to fill out a forum of tax returns. The money you get from the sale belongs to you. You can reclaim these taxes and VAT to spend on the purchase of consumables. If the goods are in China in the warehouse, it does not mean that China has sold the goods. The firm in the EU is in the same country, and the taxpayer (seller and buyer) pays tax to whoever sells. You need to fill out a Form W-9 and attach it to your Form 1099 to reflect all taxes. Then the tax office should give you a code that shows all the money you paid. In the EU, there is a very advantageous feature - charity. You can write off 10% tax https://pdf-to-dxf.com/blog/how-to-fill-out-and-file-form-1099-misc/ if you donate goods not more than 2,000 euros to someone.
 
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