May 7, 2010
Some Taxing News From France For Ebay Sellers
Some Taxing News From France For Ebay Sellers Cliff Ennico www.creators.com #147;When I sell stuff on eBay to people outside the United States, do I have to be concerned at all about paying taxes in foreign countries?#148; For most eBay sellers, who sell only occasionally to buyers in other countries, the short answer is #147;no#148;. Most foreign countries tax their citizens on goods they bring into the country #150; these taxes are commonly called #147;value added taxes (VAT)#148; or #147;general sales taxes (GST)#148; #150; but sellers who reside in the United States are not required to collect the tax or add it to the purchase price of the goods sold. It#146;s the buyer#146;s problem. As an honorable member of the eBay community, though, you should include a statement in all your auction pages as follows: #147;Buyers living in countries outside the United States may be required to pay value added tax (VAT) and other taxes on their purchases on eBay. Please consult your tax advisor for advice before bidding on this item.#148; Once you start selling lots of goods outside the United States, and especially once you start selling regularly on eBay#146;s overseas Websites (such as eBay France, eBay Italia or eBay UK), you have to start being concerned about foreign taxes, laws and regulations. A recent case out of France highlights the kind of legal hassles a serious eBay seller can encounter when his or her selling activities cross national boundaries. In this case, a professional art dealer in the United States was clobbered with thousands of Euros in fines because he was operating a business in France illegally without registering to obtain a commercial vendor#146;s license, as French businesses are required to do. The record showed that the dealer sold more than 470 statuettes, vases, and other art objects to French citizens on eBay France. The defendant claimed he was not a professional seller, having acquired his art objects from flea markets and personal relatives, and that he sold the items on eBay #147;to appease his girlfriend who threatened to move out if he did not get rid of the clutter#148;. The French court did not buy that argument. Under France#146;s commercial code (and those of some other European nations), whether or not you are a #147;professional#148; depends largely on whether or not you are selling things on a regular basis while taking measures to make profits and using the proceeds to make a living. For example, someone who buys rock concert posters in the United States with the sole purpose of reselling them in France for a profit would be considered a #147;professional#148;, even if he is not based in France or conducting his business from a physical location there. While the French case should not lead U.S.-based eBay sellers to #147;block#148; citizens of other countries from bidding in their auctions, eBay sellers need to be aware that many countries are likely to require them to pay their income, sales and other taxes #150; and comply with their commercial laws and licensing requirements -- if some of the following conditions apply: the seller is clearly engaged in business online and is not selling on eBay merely as a #147;hobby#148;; the seller posts its auctions directly on the local eBay platform (for example, eBay France), rather than on the U.S. Website; the seller#146;s auction pages are in the local language and currency, and are clearly #147;targeting#148; citizens of the host nation; and the seller is selling significant quantities of goods to citizens of the host nation on a regular basis (in other words, not just occasional sales of items the seller thinks might generate local interest because of their subject matter or content). If you find yourself in this situation, the best advice is to hook up with another eBay seller who is a citizen of the host nation, and either (1) have that person act as your local #147;agent#148; and #147;distributor#148;, hosting your eBay auctions in that country, collecting the winning bids, and dealing with the local laws and taxes, or (2) have that person act as an #147;advisor#148; to help you comply with whatever laws, taxes, regulations and other requirements the host nation may impose. For a fee, of course, or a percentage of your winning bids in that country. You can find eBay sellers in other countries on the #147;eBay International Board#148; chat room (pages.ebay.com/community/chat/index.html, click on #147;eBay International Board#148;). Be sure to check their feedback thoroughly before doing business with them, especially if they are located in a country that is prone to fraudulent online activity #150; a list of such nations is maintained and updated by the international Merchant Risk Council ( www.merchantriskcouncil.org ). Cliff Ennico ( cennico@legalcareer.com ) is a syndicated columnist, author and host of the PBS television series 'Money Hunt'. His latest book is #145;Small Business Survival Guide#146; (Adams Media, $12.95). This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state. To find out more about Cliff Ennico and other Creators Syndicate writers and cartoonists, visit our Web page at www.creators.com . COPYRIGHT 2006 CLIFFORD R. ENNICO. DISTRIBUTED BY CREATORS SYNDICATE, INC. Permission granted for use on DrLaura.com.

Posted by Staff at 1:48 AM