Tax considerations when trading overseas
With the help of Ebay and Amazon trading overseas has become easier than ever. An increase in online shopping has also meant that more and more businesses are now selling online.
Fluctuations in exchange rates may make it advantageous to buy or sell overseas however as well as considering these and lead times there are VAT considerations that you also need to be aware of.
In the UK you need to register for VAT if your business stores stock in the UK, sells goods to UK consumers and the total value of your UK sales exceeds the VAT threshold, currently £85,000.
You may however also need to register for VAT in other countries if the total of your sales to that country exceeds their VAT threshold or if stock is stored within that country. Amazon for example offer a Fulfilment by Amazon service whereby they store the stock for you in the location the deem to be most appropriate. This therefore may not be within the UK.
The VAT thresholds for selling overseas and for storing stock overseas differ but within the EU are currently set at the following:
As you can see the rates vary considerably and are not all as high as the UK. It is therefore important to ensure that you monitor the value of your overseas sales to ensure that you don't breach the VAT registration thresholds within those countries.
Ashored can help you to monitor the value of your sales by country and support you with registering for VAT if it becomes necessary.