The world is experiencing turbulent times, but some have turned adversity to advantage.
For example, some buy widgets from China and sell them to an affluent market such as North America. They use a platform like Amazon to sell and ship stored goods and a payment service like PayPal.
Others provide software as a service – SAAS.
Opportunities Abound:
The global e-commerce figures are huge – around $6 trillion of business to business transactions (B2B) per year and around $3 trillion of business to consumer transactions (B2C).
Consumers are increasingly ordering products online for delivery to the laptop or the door.
Therefore, there is money to be made:
- Buying and selling products;
- Providing online professional services from English lessons to engineering, business coaching, or administration services – sometimes known as the gig economy. A gig used to be a rock or pop concert, but now it is almost any personal service assignment;
- Developing and providing digital apps – from taxis to baby care;
- Providing agency, warehousing and logistical services;
- Providing delivery services.
How?
If you can afford to buy and hold inventory (stock), a platform like Amazon may suit you. If you cannot afford to buy and hold inventory, drop shipments of single consignments of goods on a platform like Shopify may be for you. A key question is whether you have quality control inspectors to monitor goods produced in places like China – if so, you might reduce the risks of holding inventory.
These e-commerce opportunities need harnessing, which takes time, attention to detail, and finding the right items in your knowledge zone to focus on.
Tax:
How much tax is imposed on e-commerce? Until recently, the incredible answer was not much, because business is done on the cloud and almost nobody knew how to tax it. This was true not only for income tax, also for VAT/sales tax purposes. But all that has changed and now multiple taxation is a real threat if no action is taken.
Outline Action Plan:
Action for e-commerce operators to consider typically includes ABCDE:
A: Automated reporting
B: Business nexus review – will your customers pull you into an overseas tax net even if you have no physical presence there?
C: Comprehensive structural planning
D: Double/multiple tax relief
E: Expected developments preparation
F: Further significant points – transfer pricing studies, other paperwork, substance boosting…..
Next Steps:
Please contact us if you need to discuss the above or any other business matter.
Always consult experienced professional advisors in each country concerned – we can help arrange this.
© November 15, 2024