Now, things are becoming a little more settled.
The key concept to be aware of when thinking about tax is a nexus, that is, a business with
a significant enough presence in a taxing jurisdiction to warrant tax collection. Effectively, this
means that when shipping internationally, you may not, in most situations, not be responsible
for what happens taxwise, unless your company has a significant presence in the destination
country. When shipping internally within a country (or within, say, the European Union), you
probably will be responsible. The legislation is a little unclear, and we certainly haven??™t examined
the laws for every country in the world, but this general rule tends to hold true.
The other key issues can be summed up by the following:
??? Taxation depends on where you are shipping from and to.
??? National rules apply.
??? The type of product you are selling is important.
Some countries have it easier than others. Within the United Kingdom, for example, we
can charge the current value added tax (VAT) rate on all purchases where it applies (some
types of product are exempt or charged at a reduced rate) and be relatively happy that we??™ve
done all we can. If we want to take things one step further, we can consider an offshore business
to ship our goods (Amazon does it, so why shouldn??™t we?). The United States (and other
countries) has a much more complex system to deal with.
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