Paying VAT to sell on ebay

[funnymacaco]

Let's say I sell an item for $20.
Imagine the scenario:
$3 it's for bb an pp fees.
$10 it's for shipping
$7 it's for you.

Minus the cost of the product and other costs handling the process, you get your profit.
If I setup a company to make legal my ebay sales, what do I have to pay vat for?
Vat is calculated on the $20 (total value sale) or the $7 that it's actually the price that you sell for?

I want so bad to be legal, so I will not be afraid of growing too much, but I'm afraid that If I have to pay vat over the total value, anyone who sells without paying taxes will totaly cut me off.

I know, and I will already speak to an accountant, I just want to get feedback from you guys.

[james13v]

Originally Posted by funnymacaco

Let's say I sell an item for $20.
Imagine the scenario:
$3 it's for bb an pp fees.
$10 it's for shipping
$7 it's for you.

Minus the cost of the product and other costs handling the process, you get your profit.
If I setup a company to make legal my ebay sales, what do I have to pay vat for?
Vat is calculated on the $20 (total value sale) or the $7 that it's actually the price that you sell for?

I want so bad to be legal, so I will not be afraid of growing too much, but I'm afraid that If I have to pay vat over the total value, anyone who sells without paying taxes will totaly cut me off.

I know, and I will already speak to an accountant, I just want to get feedback from you guys.

Why would you pay VAT, to sell something?