Adding 20% ​​tax makes it really hard to do business! Seller: I'm losing money

The 2020 coronavirus pandemic has enabled the e-commerce industry to develop rapidly. Many sellers have gained many opportunities because of the epidemic. However, along with the development of the e-commerce industry come not only opportunities to make money, but also stricter taxation.

Recently, a seller asked a question in a group: "What is the ship tax in the UK?" A seller said that this tax has nothing to do with the seller, but the seller who asked the question immediately posted the bill for Amazon's self-delivery, and the ship tax was listed.

The seller then said that he was doing self-delivery on Amazon and had recently received a bill in his mailbox, but he did not understand the bill and did not know where the fees shown in the order came from. "I don't know why there are so many taxes. Adding these taxes together, I'm out of pocket!"

However, someone immediately came forward to answer and said that there was no problem with the bill. Consumer VAT = (DUTY + freight) * 20%, and the freight of 5.83 pounds * 20% is the ship tax.

The problem was solved, and the seller who asked the question couldn't help but sigh while expressing his gratitude: "Adding a 20% tax is really too difficult to do."

The sellers mentioned above are just paying taxes normally. In fact, at the end of each year, the European tax authorities will conduct inspections and send tax payment emails to sellers, requiring them to pay tax payment for stores with sales history. Once tax issues arise, the account is likely to be blocked.

In fact, as e-commerce develops at an increasingly rapid pace and the e-commerce market becomes larger and larger, it is reasonable for governments around the world to implement new tax policies on it. According to foreign media eSellerafe, the following tax changes are likely to have an impact on sellers in 2021.

The epidemic shortens the grace period, and e-commerce companies will face mandatory tax collection

Since the introduction of the Economic Nexus Law and the Market Promotion Law in 2018, the tax authorities have had a new revenue source - collecting e-commerce taxes. However, these regulations have not been strictly enforced because the authorities need to give sellers and e-commerce markets some time to grow and develop, so they have given some grace time , but this situation is gone now .

The accelerated development of e-commerce, coupled with the large-scale epidemic that has caused governments to run out of money , has made it urgent to levy e-commerce taxes. Some states in the United States have begun using artificial intelligence and big data to identify unqualified businesses, while others have even started "fishing enforcement" - shopping online to see if you have to pay taxes. In 2021, the e-commerce market is expected to continue to grow, and the scope and intensity of the implementation of relevant tax laws will continue to grow.

Traditional taxation faces challenges, and cross-border e-commerce is facing digital taxation

After a long period of wrangling, quarreling and negotiation, under the organization of the Organization for Economic Cooperation and Development (OECD), the blueprint document on the taxation issues of multinational Internet companies entered the public consultation stage. The world's first international digital tax framework is expected to be released in 2021.

Since the digital economy has made a certain separation between the e-commerce market and the offline market, how to tax multinational companies has become a problem for some countries in recent years, and the traditional tax system faces great challenges . Therefore, some countries have begun to explore digital taxes and have begun to levy or plan to levy digital service taxes in recent years, including France, Spain, Austria, the United Kingdom and other countries.

As the epidemic spreads , governments around the world are likely to continue to expand the scope of business tax and digital tax collection in order to balance their government budgets . As e-commerce continues to accelerate and more and more sellers join the e-commerce industry , the issue of how to collect taxes correctly has become increasingly important , and sellers need to pay more attention to this aspect .

E-commerce platform

VAT

Cross-border e-commerce market