Required to upgrade to business or suspension

[zrxix]

Hello,

Ebay has notified me that I need to upgrade to a business acc due to my turnover over 10k from last year and that I need to pay VAT. I didn't know about this law (OSS VAT - 2021), I was stupidly under the belief that I have to stay under each country's vat threshold respectively.

The problem is I have almost 5k turnover now and I wouldn't be able to pay the VAT.

I am prepared to lose my account, my question is if they will just suspend my acc or report me to tax agencies.

Yes, I know the nature of what I am asking here, unfortunately it'd financially ruin me -- late registration fees, late declaration fees, and than having to pay it out of pocket...

Thank you for reading and feel free to roast me, for I deserve it.

[murdered_by_ebay]

you can just register business and start paying from the turnover you make now , it is unlikely you would be investigated for such a low turnover made in the past

intra EU threshold is 10K , local thresholds are only good if the account sells to customers from their country of registration

[degsey69]

EBay can not compel you to VAT register if you are under the threshold, for example UK is £85,000. They can make you register as a business over 10k turnover as the volume is not classified as personal sales.

The only benefit for VAT registration is to claim the VAT back on your eBay invoices and purchases made, however you have to pay the VAT on profit made. Under the threshold which you plainly are just convert to business and declare profit made to your IRS in your home country to pay tax on.

Also welcome to the forum.

[zrxix]

Thank you for the replies & the welcome.

@degsey69
I am supposed to have been charging (and paying it to countries where I sell to via OSS scheme) VAT since the start of the year, based on my revenue from last year.
Basically, there's this law from 2021 that unified the threshold to 10k. But the last point you made, I've been considering, thank you for your input.

@murdered_by_ebay
The issue is that Ebay is requiring proof of VAT ID and mentioned possibility of requiring also proof of having collected and paid VAT (via OSS).
I am afraid that if I upgrade to business and try to keep selling, they'll require me to prove that.

Again, thank you for your replies, input. Glad I found this forum (also a proper forum, in this day and age - the interface is a blast from the past!).

[murdered_by_ebay]

they just want you to provide VAT ID , you register a business , get VAT ID registered in the same details as ebay account and you are good to go

[murdered_by_ebay]

Originally Posted by degsey69

EBay can not compel you to VAT register if you are under the threshold, for example UK is £85,000. They can make you register as a business over 10k turnover as the volume is not classified as personal sales.

The only benefit for VAT registration is to claim the VAT back on your eBay invoices and purchases made, however you have to pay the VAT on profit made. Under the threshold which you plainly are just convert to business and declare profit made to your IRS in your home country to pay tax on.

Also welcome to the forum.

EU sellers have different rules , the most brutal ones worldwide , intra-EU sales reach about 8000 EUR during a year and they either provide VAT ID or the account is toast

[zrxix]

Originally Posted by murdered_by_ebay

they just want you to provide VAT ID , you register a business , get VAT ID registered in the same details as ebay account and you are good to go

"So, once you have upgraded your account to a business account, we will need your help in order to comply with the VAT rules and you will need to provide one of the following:

• your valid German VAT identification number (VAT ID) or
• your valid VAT ID from another EU member state and, if applicable, the confirmation that you are declaring and paying VAT via One-Stop-Shop (OSS) or
• your confirmation that your total cross-border-sales within the EU across all your sales channels are below 10.000 Euro per calendar year: http://www.ebay.com/spr/cbtdeclaration"

I am worried about the "if applicable", if they'll want it.

And thank you again, you're a great help

[murdered_by_ebay]

Originally Posted by zrxix

"So, once you have upgraded your account to a business account, we will need your help in order to comply with the VAT rules and you will need to provide one of the following:

• your valid German VAT identification number (VAT ID) or
• your valid VAT ID from another EU member state and, if applicable, the confirmation that you are declaring and paying VAT via One-Stop-Shop (OSS) or
• your confirmation that your total cross-border-sales within the EU across all your sales channels are below 10.000 Euro per calendar year: http://www.ebay.com/spr/cbtdeclaration"

I am worried about the "if applicable", if they'll want it.

And thank you again, you're a great help

basically it would be sufficient to do a confirmation now

but if you want to sell over 8000 EUR you could send confirmation now that you are below and register a business , get VAT from your country and provide it on ebay germany , then you will not be bothered with this anymore

[zrxix]

Originally Posted by murdered_by_ebay

basically it would be sufficient to do a confirmation now

but if you want to sell over 8000 EUR you could send confirmation now that you are below and register a business , get VAT from your country and provide it on ebay germany , then you will not be bothered with this anymore

Thank you, you have calmed my worries I have also realized one major thing: 90% of my customer base is from the US and I believe there's no VAT (?) and the OSS VAT scheme applies only to EU countries.

I will consult my accountant tomorrow.

Cheers, hopefully this thread will help someone one day.

[degsey69]

There is no VAT in the USA, there is state tax that requires the buyer to pay what tax there state charges.

[Hank]

Originally Posted by degsey69

EBay can not compel you to VAT register if you are under the threshold, for example UK is £85,000. They can make you register as a business over 10k turnover as the volume is not classified as personal sales.

Oh yes they can. Amazon have been doing it for years. No registration, no account. If selling cross-border then you are likely to be deemed a non-established taxable person (NETP). The laws in the EU are getting more contrived by the day, check out the main forums for the countless 'VAT headache' posts. Indeed, if selling into the UK for example their is no allowance whatsoever.

Originally Posted by degsey69

The only benefit for VAT registration is to claim the VAT back on your eBay invoices and purchases made, however you have to pay the VAT on profit made. Under the threshold which you plainly are just convert to business and declare profit made to your IRS in your home country to pay tax on.

VAT is paid on turnover, not profit.


As for your suggestion that they simply convert to a business and pay VAT on the profit in their home country..well that just wrong on all counts.


It's completely incorrect posts like this which can cost folk their accounts, why on earth tell them to ignore the instructions given to them by ebay???

[zrxix]

@Hank

Thank you for your reply.

An update & some important pointers:

- I realized that my intra-EU turnover is very small (way below 10k), 90% of my sales are to the US, to which the OSS scheme doesn't apply; so I don't have to worry about VAT anymore.
- Ebay (and other online marketplace platforms, such as Etsy) collects VAT as well as salex tax before the seller is VAT registered and remits it to tax authorities, you can read and find this information online.

[murdered_by_ebay]

it does not mean there is no risk though , if the EU threshold is reached they will most certainly block your selling within the EU and it is possible that they will block you from selling completely to anyone , I don't know exactly about this one though

[solefoodbk]

It sounds like EU is much more difficult than in United States.

[Hank]

Originally Posted by zrxix

@Hank

Thank you for your reply.

An update & some important pointers:

- I realized that my intra-EU turnover is very small (way below 10k), 90% of my sales are to the US, to which the OSS scheme doesn't apply; so I don't have to worry about VAT anymore.
- Ebay (and other online marketplace platforms, such as Etsy) collects VAT as well as salex tax before the seller is VAT registered and remits it to tax authorities, you can read and find this information online.

Then I guess as you intimated in your opening post you're just going to have to forfeit the account, they will not change their mind on their demand that you convert to a business account register for VAT. They are not interested in whether you pay any, they just want you to do it.

IMO whilst not impossible that the authorities would contact you it is extremely unlikely if you simply stop trading.

[rsot]

Welcome to the forum zrxix - all the best as you master stealth

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