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vat dropshipping

Published on: January 14 2023 by pipiads

Introduction:

When it comes to Shopify dropshipping, taxes can be a confusing topic. Do you charge GST, VAT, or tax in general? In this article, we will explore the best practices for handling taxes in Shopify dropshipping.

Charging Taxes:

- As a general rule, it's best to avoid charging taxes in order to keep conversion rates high.

- However, there is an option through Shopify to automatically charge taxes based on the customer's location.

- If you have your own e-commerce store and are selling your own products, it may be necessary to charge taxes in order to cover slim profit margins.

- If you are dropshipping, it's recommended to eat the cost of taxes and increase your prices to cover them.

GST Refunds:

- If you are dropshipping in Australia, you can get a GST refund on your marketing and expenses.

- This means that if you spend more on marketing and expenses than you make in revenue, you can get money back from the government.

Conclusion:

Handling taxes in Shopify dropshipping can be tricky, but by following these best practices, you can avoid confusion and keep your profits high. Remember to consider your specific circumstances, such as whether you are dropshipping or selling your own products, and to always do your research to stay up-to-date on tax laws and regulations.

EU VAT Dropshipping Deep Dive 2021 | EU VAT changes in July 2021 and impact on China fulfillment

EU VAT Changes in 2021: What You Need to Know

Introduction:

- This article is an update on the upcoming EU VAT changes in July 2021 and their impact on dropshippers or anyone else fulfilling directly from China into the EU.

Before We Get Started:

- The information in this video is for general guidance only and should not be used as a substitute for consultation with professional advisors.

- We recommend working with an expert in VAT, such as GetFreeTax, for something as serious as VAT tax and accounting.

What is VAT:

- Value Added Tax is a system of indirect taxation on goods and services to final consumers.

- Businesses charge VAT on their sales and recover VAT on their purchases and expenses.

Changes and Implications:

- VAT will now be assessed at the point of sales instead of at customs through the import process.

- The low value exemption on import is removed, meaning that anything going to a EU customer is subject to VAT.

- The One Stop Shop or OSS/Ioss is a different mechanism for VAT collection, but it doesn't make much of a difference in what is actually due.

- Online marketplaces like Amazon, eBay, and AliExpress are supposed to collect VAT on behalf of their sellers, but direct sellers are personally responsible for collecting and remitting VAT.

- Platforms like Shopify, WooCommerce, and BigCommerce are not responsible for VAT collection.

Conclusion:

- These changes have a significant impact on dropshippers and anyone else fulfilling directly from China into the EU.

- It's important to work with an expert in VAT and stay informed of any relevant updates.

New EU VAT rules are here! Check out VAT changes on dropshipping and distance selling

Introduction:

In this article, we will discuss various topics related to business and entrepreneurship. From the impact of new technology to the importance of supply chain management, we will cover a range of important issues. Let's dive in!

Topics Covered:

- The hype around new technology

- Supply chain management

- European Union regulations

- Sales and marketing strategies

- Custom keywords and search engine optimization

- Cross-border logistics

- Consumer behavior and privacy concerns

- The importance of system integration

Bullet Points:

- The importance of staying up to date with new technology

- The benefits of effective supply chain management

- The impact of European Union regulations on businesses

- Sales and marketing strategies for success

- The role of custom keywords in search engine optimization

- The challenges of cross-border logistics

- Balancing consumer behavior and privacy concerns

- The importance of system integration for businesses

Conclusion:

As businesses continue to evolve and adapt to new challenges, it's crucial to stay informed and proactive in our approach. By understanding the impact of new technology, effective supply chain management, and consumer behavior, we can position ourselves for success in today's ever-changing marketplace.

VAT 2021 | IOSS Explanation & Solution

Introduction:

- Explanation of VAT and IOSS situation since July 1st

- Promise to explain and demonstrate how to register for IOSS and set declaration on CJ

- Call to action to subscribe and turn on notification bell

Explanation of VAT:

- Example given to make concept easier to understand

- VAT is a consumption tax placed on a product whenever value is added at each stage of the supply chain

Explanation of IOSS:

- IOSS is an electronic portal used to comply with e-commerce VAT obligations on distance sales of imported goods

- Allows suppliers to collect, declare, and pay VAT to tax authorities instead of making buyers pay at moment of import

- Two occasions when selling to EU: orders above 150 euros and orders less than or equal to 150 euros

How to Declare with Own IOSS:

- Recommend declaring with own IOSS, which is valid and linked to destination country in EU

- Log in to CJ account, find profile, and choose declare with own IOSS from IOSS option list

How to Register for Own IOSS:

- Business can be registered on IOSS portal of any EU Member State

- If not based in EU, need to appoint EU established intermediary to fulfill VAT obligations under IOSS

How to Declare with CJ's IOSS ID:

- Log in to CJ account, find profile, and choose declare with CJ's IOSS declaration from declaration settings

- CJ's IOSS ID not applicable for orders valued above 150 euros

Conclusion:

- Call to action to leave questions in comments and subscribe to CJdropshipping Training

- Thank you for watching and see you next time.

EU VAT July 2021 And Dropshipping | What We Know About the Changes and Impact on China Fulfillment

Upcoming EU VAT Changes in July 2021 and How They Will Affect Drop Shipping and E-Commerce Store Owners

Introduction:

In this article, we will discuss the upcoming changes to the EU VAT that will be implemented in July 2021 and how they will impact drop shipping and e-commerce store owners. While there are still uncertainties surrounding these changes, we will provide an overview of what we know already and what we expect in the future.

Major Categories of Changes:

1. Removal of distance selling thresholds for VAT and introduction of the one-stop-shop (OSS):

- Previously, there was a threshold for sales in each country in the EU below which businesses were not responsible for VAT.

- The distance threshold is being removed, making businesses responsible for VAT on all sales in any EU country.

- The OSS is a method for businesses to file VAT only once, rather than separately in each EU country.

- Businesses will still need to be responsible for varying VAT rates for each country based on their customers' shipping addresses.

2. Removal of low-value import exemptions and the calculation of VAT at the point of sales:

- Previously, imports below a certain value (22 euros) were exempt from VAT.

- This exemption is being removed, and businesses will be responsible for VAT on all imports except those above 150 euros.

- VAT will no longer be declared on the value of the import but on the point of sales, meaning businesses will be responsible for VAT based on the retail price charged to customers.

- Shipping fees and transaction fees can be deducted from the VAT calculation if they are included on the customer's invoice.

3. Marketplaces deemed as responsible parties for collecting VAT:

- Marketplaces, such as Amazon and eBay, will be responsible for collecting VAT on sales made by third-party sellers on their platforms.

Impact on Drop Shipping and E-Commerce Store Owners:

- Drop shippers and e-commerce store owners who sell to the EU will be responsible for VAT on all sales, even those below the previous distance thresholds.

- The removal of low-value import exemptions will increase the cost of goods for businesses.

- VAT will be calculated based on the retail price charged to customers, rather than the import price, which may affect profit margins.

- Marketplaces will be responsible for collecting VAT, reducing the burden on individual businesses.

Conclusion:

The upcoming EU VAT changes in July 2021 will have a significant impact on drop shipping and e-commerce store owners selling to the EU. While there are still uncertainties, businesses need to prepare for these changes and ensure they are compliant with the new regulations. The OSS and the responsibility of marketplaces to collect VAT may make the process more streamlined, but the removal of distance thresholds and low-value import exemptions will increase the cost of doing business in the EU.

How to do Taxes in Dropshipping- Complete Guide for 2022

In this video, we will discuss how to do taxes with drop shipping. It's important to note that this topic is only relevant after you start making sales. If you're just starting out, don't worry about it yet. Here are some tips to keep in mind:

Introduction:

- Doing taxes with drop shipping can be tricky

- It's important to keep track of all expenses and profits

- Collect receipts and invoices for every transaction

- Work with one supplier to make accounting easier

Tips:

1. Keep track of all expenses and profits

- This is crucial for accurate accounting

- Don't wait until the end of the year to organize everything

- Keep track of fees, refunds, and losses

2. Collect receipts and invoices for every transaction

- Every expense must have a receipt

- Use a folder to keep all receipts in one place

- Invoices are required by law, so make sure to have them for every customer

3. Work with one supplier

- Multiple suppliers can complicate accounting

- Use an agent or a warehouse that carries all your products

- This will make accounting much easier in the long run

4. Prioritize money-making activities

- Accounting is important, but it's not a money-making activity

- Focus on sales and marketing first

- Spend 30 minutes per week on accounting

5. Keep track of Facebook ads

- Download receipts and invoices for every transaction

- Keep them in a separate folder

- Losing access to a Facebook account can result in losing receipts

Conclusion:

In conclusion, doing taxes with drop shipping is not impossible, but it requires careful organization and attention to detail. Keep track of all expenses and profits, collect receipts and invoices, work with one supplier, prioritize money-making activities, and keep track of Facebook ads. By following these tips, accounting will be much easier and less stressful.

Dropshipping Taxes in Europe The Truth!

Introduction:

In this video, we will be discussing taxes in Europe, a topic that is not often talked about. As a dropshipper, understanding taxes is important for minimizing costs and maximizing profits. We will cover company taxes, VAT taxes, and taxes for distribution.

Income/Capital Tax:

- Rates vary by region, with Germany being the highest at 30%

- Losses can be used to reduce taxes

- Business expenses can also be charged as deductions

- Opening an offshore company to avoid taxes is not recommended due to CFC rules

VAT Tax:

- Reaching a certain revenue threshold requires paying VAT in that country

- The threshold varies by country

- It is important to understand the rules in each country to avoid penalties

Conclusion:

Understanding taxes is crucial for dropshippers in Europe. By researching the rates and rules in each country, it is possible to minimize costs and increase profits. Avoiding offshore companies and following CFC rules is important to avoid penalties. It is important to keep up with changes in tax laws to stay compliant.

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