Dropshipping and VAT

[Neqzwer3]

Hi
I have a dropshipping shop.
I buy from China for EU base customers.
My cost is a 50 EUR
My sale is a 100 EUR
Profit is a 50 EUR.
So i should pay 20% Vat from my profit or from sales price?

 

[LucyOffshore]

VAT always from sale price.

 

[Drifter GSE]

Yes. Vat must be paid on your sale price/turnover

 

[W4rhol]

If you do dropshipping with a UK or Irish company, then if I remember good you are the middleman for the tax administration, not the importer. The importer is the client and it's him who have to pay the VAT.

 

[Neqzwer3]

W4rhol said:
If you do dropshipping with a UK or Irish company, then if I remember good you are the middleman for the tax administration, not the importer. The importer is the client and it's him who have to pay the VAT.
Click to expand...

I am only an intermediary in the transaction between the customer and the supplier in China. VAT on the total amount of sales may destroy my business

 

[Neqzwer3]

I also have a social media business where I buy services from American companies and sell them with a profit for clients in the European Union. I would like to avoid paying VAT but it's probably not possible.

 

[W4rhol]

First, in which country you live ? And then, for such question, you should see a tax advisor. Fraud the VAT is a very dangerous game if you live in the EU... The benefit don't worth the fine...

 

[Neqzwer3]

I live in UK and i have Limited Company in UK

 

[LucyOffshore]

If you don't mind. How much turnover and profit are you making each month? Depending on this I can give you a solution.

 

[JohnLocke]

LucyOffshore said:
If you don't mind. How much turnover and profit are you making each month? Depending on this I can give you a solution.
Click to expand...

be carefull that this does not turn into any promotion! So far no warning given!

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[Neqzwer3]

LucyOffshore said:
If you don't mind. How much turnover and profit are you making each month? Depending on this I can give you a solution.
Click to expand...

About +/- 15 000 GBP Profit

 

[LucyOffshore]

You have an option to do everything by the book and charge 20% VAT for EU customers, 0% VAT for outside EU customers.

Or what I would suggest since it is an online business is that you run it with darks and forget about the VAT. If you already have a company formed for this then sell the business (for cheap so you don't pay high tax) to an offshore company run by darks (which you control in the background) and then give loans to an onshore company you own.

 

[negon]

You have to pay VAT, however, if you register a offshore company and you are able to get some payment processing for this company it will solve your problem with VAT since you can forget about it.

 

[theman78]

What kind of goods do you sell? clothing?

 

[Neqzwer3]

I sell different hot products