The issue of taxation in e-commerce is very important and a complex issue for many businesses. The taxation process of e-commerce businesses is different from the taxation process of traditional stores. Therefore, e-commerce businesses should be careful about tax matters and submit the required tax returns on time. First, it’s important to understand what types of taxes e-commerce businesses are subject to. E-commerce businesses, generally subject to;
- Income tax
- Value Added Tax
- Corporate Tax.
Income Tax
Income Tax is calculated based on the income earned by a person or business.E-commerce businesses may also be subject to this type of tax. In this case, the gross income of the business is subject to Income Tax.
Value Added Tax
Value Added Tax, or VAT, is the tax that consumers pay. E-commerce businesses are also subject to VAT. Since e-commerce businesses sell their products over the internet, the sale of products is subject to VAT. Since VAT is the tax collected from the customer, e-commerce businesses should reflect the VAT to their customers.
Corporation Tax
Corporate Tax is calculated based on the profit a business makes. E-commerce businesses are also subject to this type of tax. In this case, the profit of the business is subject to Corporate Tax.
Other Taxes
In addition to these tax types, e-commerce businesses can also be taxed for special circumstances. For example, before deciding whether a business is taxable, it’s important to review the tax laws of the country in which it sells. Some countries apply different tax rates to products sold. Therefore, if e-commerce businesses are selling in these countries, they must file a tax return in accordance with the relevant tax laws. E-commerce businesses must submit their tax returns accurately and on time. Tax returns must be prepared in accordance with the tax laws of the country in which the business operates.
Regulations For E-Commerce Businesses
Whether you’re a small business, a start-up, or a fast-growing midsize company, your online operations are likely to be regulated by corporate, copyright, and contract laws, among others. The laws surrounding consumer protection and corporate governance are already mandatory.
E-commerce is a relatively new branch of retail. Similar to other types of online businesses, you must comply with the general corporate laws and local and international laws that apply to your business. Additionally, you will need to comply with digital-specific provisions regarding web accessibility, data privacy, and electronic payment processing that may apply to your store.
To stay on the safe side, you should take the time to learn about the right and wrong. The sub-headings you need to know about tax in e-commerce are as follows:
- Taxes
- Payment gateways
- Trademarks, patents and copyrights
- Shipping restrictions
- Inventory
- Business insurance
Taxes
Vergiler, e-ticaret alanında da birkaç farklı sınıfa göre karşımıza çıkar.
Import Duties
If you import products that exceed a certain threshold from suppliers abroad, such as dropshippers or wholesalers, your imports may be subject to customs duties. If you sell the products your store offers internationally, your foreign customers may have to pay import taxes and duties. You can choose to pay on their behalf through duty prepaid shipments offered by some third-party logistics providers, or you can package them at an international price. For example, European and Australian customers are used to seeing all-inclusive prices.
Eco Taxes
To promote sustainability, many states impose taxes on activities and items that may be harmful to the environment. International businesses should also pay attention to local eco-taxes. Europe, for example, is far ahead of charging extra for unsustainable products, shipping or packaging practices.
Payment Gateways
Payment gateways are the lifeline for securely processing customer payments. The key word here is security, as a payment data breach can lead to a large regulatory fine. Not to mention the indirect losses associated with damage to your brand image.
Trademarks, Patents and Copyrights
Trademarks, patents and copyrights are considered commercial intellectual property and are therefore protected by applicable law.
Trademark
A word, phrase, symbol and/or design that distinguishes and identifies the origin of one party’s goods.
Patent
A limited-term title to an invention granted by the United States Patent and Trademark Office in exchange for public disclosure of the invention.
Copyright
Concretely expressed writings protect works of authorship, such as music and works of art. In other words, if you take the appropriate steps regarding your intellectual property, you can enjoy legal protections that prevent other brands from using your intellectual property without your consent.
Shipping Restrictions
E-commerce shipping can be mind-blowing at times, as logistics companies have different rates, rules, and restrictions for shipping different types of products. Most shipping companies clearly note their restricted items. Some commonly restricted items are:
- Aerosols
- Airbags
- Alcoholic beverages
- Ammunition
- Animals
- Cigarettes
- Dry ice
- Explosives
- Fresh fruits and vegetables
- Dangerous materials
- Perfumes
Inventory
An online boutique may be considering storing clothes in a spare closet for shipping, or putting some handmade jewelry-like items in a storage container. However in this way, the business may become too large to legally leave the owner’s home. If a significant amount of inventory will be available, the business owner should also check real estate lease, title or zoning codes to see if there are any prohibitions on running a business, such as considering removing it from his home. This is a legal requirement.
Business Insurance
Business insurance isn’t always legally required for e-commerce store owners. If you are operating as a registered business, such as a limited liability company, your personal assets may already be protected. However, as laws may vary depending on where you operate or where your legal entity is established, you will want to consult a legal counsel to make sure this is correct. While this may be true for your situation, it may also be beneficial to insure your business for:
- General liability
- Product liability
- Professional responsibility
- Commercial liability
Product liability insurance protects you against various risk scenarios. This type of insurance is especially important if you plan to sell products that are considered high risk, such as CBD.
