Want to sell online? Know what you’re doing with these 4 tips
As a partner of Start it @KBC, the financial experts of PKF – VMB try to help our startups out by giving them helpful financial advice. Wouter Brackx is a VAT partner at PKF – VMB, and he’s got a few interesting tips on VAT for startups that want to sell online.
Offering your products or services online, is obviously a great way to reach a very large audience As long as they find the way to your website, people all over the world can see and buy your product. But those international transactions are also complex: they are subject to VAT, GST and other use taxes that you may not know about. Here are 4 tips to make sure these taxes don’t impact your margin.
#1 Know what you’re doing
The VAT treatment of a transaction depends on a long list of factors. Take a proper look at all your different business scenarios and get to know the different VAT consequences, to avoid unpleasant surprises.
#2 Collect evidence
When you sell online, tax authorities from different countries may request evidence that you correctly did or did not apply the VAT of their country on certain transactions. Plan ahead and make sure you know what kind of evidence you need to collect.
#3 Make VAT compliance a priority
VAT should be a key concern for a startup, because not handling it correctly can have disrupting financial and operational consequences. If you don’t operate in a VAT compliant way, you may even be removed from online marketplaces.
#4 Use the existing simplifications
There are a number of VAT simplifications for small online retailers, especially for trade within the European Union. And even more simplifications will follow in the coming years. It would be a shame not to use them, so explore all these possible benefits for your online business.