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Sales tax for international selling

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Sales tax for international selling

Post by MrHustler » Fri, 11 Nov 2016 9:42 pm


A little background info about me, I'm a Singaporean and I have no business background. I just started a drop shipping business and decided to expand my business by selling internationally. Some countries I would like to tap into are USA, UK and Europe.

I would like to seek some advice about sales tax here in Singapore and Internationally.

1) Who to look for to get the input for tax rates in various countries and states?
2) How am I going to pay the sales tax ?

Looking forward to the replies. Thanks.

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Strong Eagle
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Re: Sales tax for international selling

Post by Strong Eagle » Sat, 19 Nov 2016 2:46 am

You are going to need to determine sales tax requirements on a country by country or state by state basis. For example, in the USA, most states do not require a company to charge sales tax if they have no physical presence in the state. So, a company in New Jersey, importing phone chargers and selling them online will not charge me sales tax. A company in Texas selling exactly the same product from exactly the same source would need to charge sales tax because of their physical presence in Texas. Companies like Amazon pretty much collect tax in all states regardless of physical presence (although they keep building more and more distribution facilities).

Note that although I don't pay sales tax for buying from the New Jersey company but I am _supposed to_ remit the sales tax myself... you think that happens very often? Quite a few brick and mortar retailers are pressing to have this sales tax gap closed. I think this is a good idea.

Most of Europe is on the VAT system, not sales tax, and if I recall, generally, you will have to collect and remit VAT for the countries in which you sell... you must be VAT registered. However, if you were to have to pay VAT yourself for any reason, you'd get to deduct it from the amount you need to pay.

You might consider selling through Amazon or eBay. Besides giving you a global platform, they will know all the ins and outs of taxation requirements.

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