Business selling on eBay? Laws on Tax, Vat, importing etc...?

n.d.os

I have been selling online for a number of years (personal items) and have recently decided that i would like to turn this into a career. I have found myself a number of niche market items to sell continuously on eBay (business seller) which i will be importing from outside the EU. Can somebody break it down simply how i can do this legally without any grief from the taxman? I need simple, easy to understand information on VAT, Tax, import duties etc...

My understanding of this is that i would be required to register as a sole trader, do yearly tax returns and only pay VAT if i am earning over the bracket they have stated within this country. However how do i insure that i am importing legally as more often than not packages from outside the EU arrive straight to your door without customs duties.

Does anybody else on here purely make money from eBay? I am currently a full-time mature student, i have plenty of savings, i dont work, and i basically want to do everything legally. I have market tested these items and i am very confident that this will be an extremely profitable enterprise.

RUDOLF289

Hello N.d.os,

First of all, the threshold, after which you are obliged to register for VAT is € 75K per annum, if you are supplying goods.

However, if you are buying goods to sell on, a VAT registered trader is entitled to claim the VAT paid on imports back. Therefore, if you are importing from outside the EU and pay VAT on your imports you can claim it back if you are registered for VAT.

If you are not registered for VAT and pay 23% VAT on imports, that VAT becomes part of your cost price. Therefore, it would make sense, even if you stay under the threshold, to register for VAT. Obviously, if you are registered for VAT, you need to charge VAT on your sales.

I suggest to have a look at the attached VAT guide, specifically ;

Chapter 1
Chapter 2.2, 2.3, 2.15, 2.16, 2.17
Chapter 3.1, 3.2
Chapter 5.1, 5.2, 5.3, 5.11, 5.14, 5.15
Chapter 7.1, 7.5, 7.6, 7.8, 7.9, 7.10., 7.11

There may be sections in Chapter 10, 11, 12, 14 and 15 that are also relevant
In all, a bit of reading to do and maybe you need to have a word with an accountant on you registration and filing requirements.

In relation to importing small quantities, if you are receiving parcels without having to pay duty or VAT, you are lucky. You can take it as read that if you start importing on a more regular basis, you are likely to find that more and more of your parcels will attract duty and VAT. Have a look at this thread on boards.ie ; http://www.boards.ie/vbulletin/showthread.php?threadid=2055862554

In relation to import duties / customs classification / customs tariff numbers, suggest you contact the Customs Classification unit in Nenagh. See page 7 of attached guide.

If you want to make a business out of this, suggest to speak to an accountant about the merits of registering as a sole trader v. a limited company. Also, have a word with the VAT office. There are some public notices / leaflets available that go into more detail on certain subjects.

Best of luck with your new venture

Cheers,
Rudolf289

n.d.os

A lot of people are telling me to speak to an account which i think might be the best option alright. I have people in my own family running their own businesses who can't tell me the information i need so it is pretty apparant that many people run businesses without knowing what they are supposed to being doing legally and leave this up to someone else in the business to worry about. Thank you for your help anyway. Greatly appreciated.