Income TAX on PAN EU sales

#1

Hi everyone,

So I’m the process of signing up to PAN EU. I just wanted to find out about the income tax side of things. So when speaking to all the affiliated companies who manage the VAT returns they do not seem to have any knowledge on where to pay income tax for those markets. Would the income tax be a part of the UK or would it have to be done by each country as that would determine if it is worthwhile doing or not as the accounting fee’s (separate from VAT returns) could be pretty expensive and not worthwhile.

Any help would be highly appreciated!

Thanks

#2

Income tax is paid on your earnings, so nothing to do with the sales as such.
It doesn’t matter where your selling, the tax is based in your own country. Though there are of course exemptions to this, but unlikely that you will hit them.

I strongly suggest that you speak to your accountant about it.

#3

Hello @Zoaun,

As @NEil said the most reliable information around Tax you can get it from your accountant.
Here you can find some information over PAN EU.

Regards
Nickolas

#4

Are you based in the UK?

You need to understand the differences between all of the taxes ie income tax, sales tax VAT or corporation taxes.

All you need to concern yourself on Amazon as far as trading in Europe is concerned is Euro VAT, every other tax then tends to be domestic. Income tax is based on company profit and you will pay the tax to whichever jurisdiction you physically operate.

It may make it simpler if I tell you that you don’t pay any tax outside of your own jurisdiction and the same goes for VAT. It is the customer that pays the VAT ie end buyer but you or Amazon take the VAT and then you or Amazon pay the VAT on the customer’s behalf. This is why VAT is relevant to you but income tax has nothing to do with the customer transactions.

Amazon have VAT services to help you with the VAT, but they don’t have any other tax advice because to be fair anything else depends on what you do in your company a whole not exclusive to Amazon.

It is not expensive and can be worth while. At the end of the year I calculate my European sales and these are submitted onto my annual accounts and any VAT I have paid through my returns is then deducted. Any sales whereby Aamazon have paid this through IOSS stays in the European sales. In my case the Euros are then converted into pounds and I pay the relevant taxes on the net income/profit.