Alibaba VAT Charge and Import tax?
Hello
I am new to selling on Amazon so we are unlikely to exceed the threshold of £85k turnover so we are not tax registered.
On Alibaba, to be tax exempt they need my VAT number which I cannot obviously provide which means not only do I have to pay 20% VAT to Alibaba but also 20% on VAT imports when my products dock in the UK.
Has anyone come across this?
I contacted Alibaba who said I pay VAT on Alibaba.com, VAT should not be charged again by the customs/logistics provider. However, If I am charged twice on VAT, I could try to apply for a tax refund.
Has anyone gone through tax refunds with Alibaba before? It’s when someone says “should” which worries me. Not even sure why Alibaba is charging 20% tax.
Thank you in advance.
20 replies
Seller_esvgLzKXw2YAl
Are you quite sure that your understanding what your being told?
They shouldn’t be charging you vat on the sale as far as I understand it.
Unless of course they are sending it duty paid, in which case you won’t be charged the import vat.
Be very careful as there are some dodgy traders on Alibaba. Be sure to get a test order first, so that you can see the product that your buying.
And don’t buy large quantities, as if it’s new to market, it will be very difficult to get sales initially.
Especially, if it’s just one of many, with different brand names on.
Have you considered sourcing closer to home?
It’s far less hassle and with the cost imports these days, a lot closer in price than you might think.
Seller_sMHWnPIIncJG9
Thank you for your response Neil.
I have numerous emails from Alibaba stating that they are obligated to collect VAT for purchases made through their marketplace unless the buyer is except VAT. As you say, that might just be relevant to DDP (well at least I hope that’s the case!).
I do have my concerns about using Chinese suppliers but I have tried to mitigate the risk as much as possible by:
(1) receiving samples,
(2) basing the bulk order on the samples to prevent the supplier from using cheaper materials for the bulk order
(3) paying 30% upfront and the remaining 70% after my Chinese agent has inspected the goods based on pre-agreed criteria with the supplier
(4) employing my own freight forwarder and customs broker rather than relying on a supplier as the core business is manufacturing (not logistics).
What website would you recommend for finding suppliers local to home? I am familiar with Dhgate and global sources but it’s still mainly Chinese suppliers dominating the platform.
Thanks again.
Seller_amUAzjvL5uIzu
I buy regularly from Ali & never paid import VAT its always added at source to all my orders.I’m not VAT registerred
