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VAT and other taxes for online merchants
Online merchants are
face various tax obligations, including value added tax
(VAT) and others that occupy a central place in their financial and legal framework.
Understanding these requirements is important for successful online management and development
business, ensuring compliance with legislation and optimization of
the tax obligations.
That's why it is
it is necessary for online traders to be informed about the latest changes in the laws
and regulations that may affect their operations, and find out how
correctly apply VAT and other relevant taxes in their work.
From BigArena.net you will
let's take a look at some important points about taxation that you should know if
you are doing online trading.
What is online trade and who is defined as a trader?
Online trade
represents the purchase and sale of goods or services for profit, which
carried out mainly through e-shops, online platforms (such as Amazon,
eBay), those for ads (OLX, Bazar.bg), social networks (Facebook, Instagram) and
other similar.
Even if you sell
online, you should be aware that this method is not much different from the same
business whose operations go through a physical store, from the point of view of
taxation against tax legislation.
As a Merchant,
the meaning of the Commercial Law, means any natural or legal person,
which carries on a trade, in the sense of a transaction for the purchase or sale of
goods or services.
Declaration of income and taxes due
The declaration of
income from e-commerce is an important process that relates to the taxation of
the income received from the exchange of goods or services on the Internet for financial
benefit. What are the key aspects?
1. Which sales of goods
Cash on Delivery (COD) is taxed and which ones are not?
- exempt from taxation - the funds received from the sale of personal items that were acquired for personal use use and are not used for resale or production for profit, do not taxed. Individuals are not required to file a tax return for the income from transactions with such items;
- taxed – the sale of goods purchased for the purpose of their subsequent sale to customers and the realization of profit, is a commercial activity, the income from which is subject to taxation. It is possible that it was carried out by a person who is not a merchant within the meaning of the Commercial Code law, for example: self-employed (an artist who sells works you are on the Internet); by an individual practicing a trade (in relation to VAT); sale of works of art, collectibles and antiques. This means that even one-time transactions are taxable. Only if the relevant items are acquired by inheritance, then their income from their transaction is not subject to taxation.
2. Declaration of income
from online trading
In advance
the completed tax return will be available data from direct payments, p
which the National Revenue Agency has for the realized annual sales turnover on the Internet,
regardless of what means of payment are used. In case the income from
Cash on Delivery (COD)s are subject to taxation, citizens will have to declare them in
the relevant application. In the case of online activity, it is important to issue a fiscal receipt
as transaction documentation.
3. VAT registration
The persons registered
under the Value Added Tax Act (VAT), you must
charge VAT for any taxable supply of goods or services over the Internet.
This information is
summary and is not a substitute for consultation with a tax professional and such
familiar with the Law on Local Taxes and Fees (LAT). Citizens should
consult with the relevant authority on such matters to ensure the correct
duties and procedures.
See Also
