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I am presently contemplating a small start-up online and am looking into the various pitfalls before getting too invested into it.

The website might be hosted on servers in Europe or the US and I reside within the EU.

My target audience shall be mostly English-speaking nations (UK, US, Canada, Australia, etc.) with scope for expansion if things go well.

Now the problem is that I have no idea what kind of a tax chunk I need to account for, and it is not clear to me how I should price (tax inclusively) so as not to be taxed into the red.

So... should I consider a single price for all regions (and how might I draw the conclusion of what that markup should be?)?

Are there any guidelines or resources that more seasoned individuals than myself can suggest?

Thank you for any insights.

  • More information would be helpful. The following points may affect tax issues: – Adam Michael Wood Jul 2 '14 at 16:10
  • What is your own tax jurisdiction? – Chris W. Rea Jul 2 '14 at 21:59
  • @AdamWood What further information would be helpful? It is going to be a website providing an online service - not too dissimilar to an online game. No physical product goes to the clients although success might lead to such in some small capacity. – Avestron Jul 4 '14 at 6:28
  • @ChrisW.Rea I reside in Malta - but I suspect that wasn't a helpful answer - In trying to better understand your question I came across slideshare.net/Acumum/… – Avestron Jul 4 '14 at 6:29
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Usually, your situation is a generalized form of import/export, with you as the net exporter of goods/services and the individual consuming your goods/service as net importer.

Import export laws vary from country to country but following are the general tariffs/taxes applicable:

  1. Export tax/duty: From your sovereign jurisdiction (read country/region/EU region), there could be export restriction or tariffs applicable to your exported goods/services on the other hand there may not be any, check with EU export law on this and then your country specific law. If there is any tax/tariff payable, you shall have to pay the same on the transactions.

  2. Import tax/duty: This is more related to your customer who is purchasing the goods/services from you, however, you should know this. Your customer will be liable to pay any import tax/duty as applicable for importing of your goods/services in that country/region, if it is applicable.

  3. Shipping Insurance: If it is a physical goods, there would be shipping and with shipping comes insurance and indemnity (if applicable). So there is a cost to it, you need to be aware of this.

  4. Sales Tax: There is no Govt. on earth or history which does not or did not charge sales tax in some form or the other. EU/country will also have sales tax, you should be aware of this as per transaction you may have to pay sales tax to the Govt. This would add to the cost.

  5. Credit of Foreign Currency Payments: Some countries have tax/tariffs attached to foreign currency credits/transfers or bank charges attached to the same, you may have to open specific type of bank A/C to receive the credits. These laws are specific to country/region, you should be aware of the same.

The above are generic considerations and not specific to EU and to a greater/lesser extent applicable to all countries/regions. Best would be to search the net on the above points for EU region and get answers or approach a chartered accountant who will give you all the information.

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