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E-Commerce Tax rules & considerations [2019]

Tax is usually paid by e-commerce business owners quarterly, that is, they pay it four times in a year. It is advisable to pay in this manner because the failure to do so may invite a lot of payment to you all at once and this may affect your business greatly.

E-Commerce tax considerations

All business owners fear one thing, be it a small or large business, they all fear being taxed. This is so because taxation might be very frustrating at times, it is a charge you have to pay compulsorily even though you have a small business. Having a business where you have a sales book where records are made is easier to tax because you will be taxed based on your record.

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But nowadays, most business are carried out online and it might be very hard to record how transactions are carried how except taxes a paid with the goods themselves. All businesses around are charged with a popular tax referred to as the sales tax, this is the tax charged on all goods and services are business is involved in.

E-Commerce Tax rules

A business can establish a sales tax nexus and there are some factors that can help to establish a sales tax nexus. These factors include:

  • Your locality, that is, the place you stay will determine if you will be charged a sales tax or not. In the United States there are some states therein that do not have sales tax such as the Oregon and four other states. These states do not charge the businesses around them sales tax.
  • Another factor is Personnel which is any individual be it an employee, salesman, or contractor carrying out activities for your business in a state where they pay sales tax. This will create a tax nexus for a business owner.
  • Home state nexus, that is, the place you reside for business will contribute to your tax nexus, if they pay tax there, you have to pay your tax as well.
  • Creation of an Inventory; if you have stocks Inna particular place might create a tax nexus for you because you can possibly make some sales in the region and you automatically have to pay tax for such sales.

For all business owners that are obliged to the payment of tax in one way or the other, it should be noted that tax payment varies from state to state and also from country to country. This means that the way a state will charge its own tax will be different from the way another will tax. Normally, tax is usually paid by e-commerce business owners quarterly, that is, they pay it four times in a year. It is advisable to pay in this manner because the failure to do so may invite a lot of payment to you all at once and this may affect your business greatly.

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As a business owner, it is advisable that you seek the help of an accountant when you want to prepare your tax payment. The accountant can help in the following ways:

  • He can help to save you’re from stress and makes payment more faster
  • He helps to offer nice and sound decisions
  • He helps to assist in planning of future growth
  • He helps to teach and enlighten business owners more about taxation.
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Vinod Kumar

Vinod Kumar is Human Resources & Management or HR Manager in a renowned car manufacture company and deals all kinds of disputes under PF, ESIC and other benefits for employees. And holds the management command in his hands.

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