clever currency management & vat
TRANSCRIPT
VAT & Clever Currency Management - Webinar for International Sellers (Feb. 28 2017)
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Your Participation
05/03/2023
Topics to be discussed Welcome & introductions
Understanding when you need to register for VAT Marketplace requirements & VAT IDs Filing your tax returns & remitting international tax What are your options when repatriating profits World First’s marketplace solution Paying your international tax in local currency with World First How you can mitigate currency risk return when repatriating
profits.
2013 Meridian Global Services
Chris O’Shea Channel Manager Meridian Global Services
Phone: + 49 1520 9204 308 Email: [email protected]: www.meridianglobalservics.com/blog Web: www.meridianglobalservices.comTwitter: @MeridianVAT
Brian MalesaeCommerce SalesWorld First USA
Phone: 737.226.5204Email: [email protected] Blog: https://www.worldfirst.com/us/blogWeb: www.worldfirst.comTwitter: @WorldFirstUS
Meet the panelists
5
Introducing Meridian
Corporate Profile• Global leader in international
VAT solutions including VAT recovery, compliance, consulting, audit and VAT reclaim
• 21+ years experience• Over 10,000 clients worldwide• Serving clients globally
through 32 offices• Global centre of excellence
based in Dublin• 550 FTE –
(with 300 FTE in Dublin SSC)
• ISO Quality Approved
6
Introducing World First
Corporate Profile
• Global leader in international payment and currency risk management solutions.
• 10+ years experience in the e-commerce space
• Over 100,000 clients worldwide• Serving clients globally through 7
global offices• Global headquarters located
London the center of FX world• Globally licensed and bonded• SSAE 16 audited.
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What is VAT? “VAT” stands for “Value Added Tax”
Various rates - standard rate, reduced rate, zero rate, VAT exempt
VAT is paid to the government directly by the producer, and the cost is passed on to the consumer
VAT avoids the cascade effect of sales tax by taxing only the value-added at each stage of production
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VAT Registration / VAT Compliance VAT is becoming a more significant source of revenue for jurisdictions there is a greater
focus on enforcing compliance and combating fraud
Tax authorities are being more aggressive in how they treat VAT errors/shortfalls
Where companies have a VAT obligation, they need to:
Set up a VAT registration (no permanent establishment or corporate tax issues); and Produce & submit regular VAT returns, EC Sales Lists, Intrastat reports accurately on time compliant with the prevailing national legislation Pay (and recover) the required tax
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Importation…
Import subject to import VAT rules (VAT and duties)
Are you importer of record?
If yes, then register for VAT in the UK so you can recover your import VAT
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How does VAT affect US sellers when selling in the EU? Sales to customers in the country of importation (ship from country)
Sales to customers in other EU countries as a result of distance selling
Sales in EU countries of the customers while storing / warehousing goods in those countries
Concept of movement of own goods within the EU
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US seller imports and performs domestic sales Amazon FBA
Customer(private individual)
in the UK
US seller
US seller(UK warehouseFBA Amazon)
UK warehouse UK
US seller(warehouse in the USA, i.e. outside
of the EU)
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US seller imports and sells to customers in other EU Member States/ distance salesFBA Amazon
Customers(private
individuals)in France
US seller
US seller(UK warehouseFBA Amazon)
20% UK import VAT paid by seller
20% UK VAT (sales below
threshold)UK VAT number
UK warehouse France
US seller(warehouse in the USA, i.e. outside
of the EU)
€ 100,000
20% French VAT (sales above threshold)
FR VAT number
US seller has a VAT
registration in France
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US seller imports and sells to customers in other EU Member States/ distance sales FBA Amazon
Customers(private
individuals)in France
US seller
US seller(UK warehouseFBA Amazon)
20% UK import VAT paid by seller
20% UK VAT (sales below
threshold)UK VAT number
UK warehouse France
US seller(warehouse in the USA, i.e. outside
of the EU)
€ 100,000
20% French VAT (sales above threshold)
FR VAT number
US seller has a VAT
registration in France
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Movement of own goods, US seller preforms domestic sales FBA Amazon (MCI in other EU countries)
Customers(private
individuals)in France
US seller
US seller(UK warehouseFBA Amazon)
20% UK import VAT paid by seller
UK warehouse France
US seller(warehouse in the USA, i.e. outside
of the EU)
20% French VAT (sales above
threshold)FR VAT number
US seller(French
warehouseFBA Amazon)
French warehouse
US seller has VAT registration liability in both
the UK and France
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What is distance selling and a distance selling threshold? Supplies of goods from one EU Member State to private individuals
residing in another EU Member State transported by the supplier directly to the customer
Special rules governing such supplies known as distance selling rules
Where the total net value of goods supplied to customers in each EU Member State in a calendar year does not exceed the distance selling threshold for that jurisdiction (€ 35,000 or € 100,000.
Option to VAT register in the customer´s country prior to reaching distance selling threshold
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Not being compliant? Penalties... Repay all of the tax owed – up to 10 Years
Pay interest and fines of up to 200%
Company directors can be personally liable
Imports seized by customs authorities
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Repatriating your money - your options
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Benefits of repatriating monies with World First
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Quick guide to linking your World First account
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Quick guide to linking your World First account
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Paying your international tax in local currency
Pay directly out of your World First Accounts
Avoid double conversion fees
Better overall control of your money
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Currency Products
Forward contractsA forward contract will allow you to fix a rate for up to 3 years
Rate alertsGet an email notification when your target rate is reached
Firm ordersAutomatically trigger a payment if a certain rate is achieved
Market watchLet us be your eyes and ears on the currency markets
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Forward ContractsA forward contract can be used by a seller to control their profit margin and pricing for a chosen period of time.
For example: your disbursements are £50K per month, and your profit margin is 5% with GBPUSD rate at 1.24. If you’re relying on the spot rate you are open to market fluctuations and therefore your profit margin can change. If you had booked in a forward contract at 1.24 to protect your profit margins, you would retain the 5% margin.
Pros• Allows you to forecast your disbursements • Budgeting your pricing to protect profit
margins• Allows you to focus on other areas of your
business
Cons • You do not benefit if rates moves against
your forward rate.
2013 Meridian Global Services
Chris O’Shea Channel Manager Meridian Global Services
Phone: + 49 1520 9204 308 Email: [email protected]: www.meridianglobalservics.com/blog Web: www.meridianglobalservices.comTwitter: @MeridianVAT
Brian MalesaeCommerce SalesWorld First USA
Phone: 737.226.5204Email: [email protected] Blog: https://www.worldfirst.com/us/blogWeb: www.worldfirst.comTwitter: @WorldFirstUS
Questions?
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Disclaimer These comments are the views and opinions of the author and should not be construed as advice. You should act using your own information and judgment.
Whilst information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed.
All opinions and estimates constitute the author’s own judgment as of the date of the briefing and are subject to change without notice.
Any rates given are ‘interbank’ i.e. for amounts of $5million or more thus are not indicative of the rates offered by World First.
World First USA, Inc. is a Delaware corporation, registered as a Money Services Business in the United States with FinCEN (Registration number 31000099952286), and holds licensing as a non-depository financial institution with the Nationwide Multistate Licensing System (NMLS#1018479). World First USA, Inc. is also registered in Canada with FINTRAC (registration number M11393445).