How to pay Shopee's VAT and corporate income tax?

Opening a store online involves paying taxes. Cross-border e-commerce business also requires paying taxes. However, when selling products on Shopee, only the Taiwan and Indonesia sites have taxes. So how do you pay Shopee's value-added tax and corporate income tax?

1. How to pay taxes

If it is a small-scale enterprise and it only issues ordinary invoices, it does not need to pay value-added tax if the amount is less than 300,000 yuan in a quarter. If it exceeds this amount, it needs to pay it. If it issues a special invoice, it needs to pay tax. If the enterprise is in a loss-making state, it does not need to pay corporate income tax, but it needs to pay it if it is profitable.

If it is a general taxpayer enterprise, the calculation will be based on the issued invoices and cost invoices, as well as the declared wages and reimbursement invoices for the company's daily expenses, to see whether it is in a loss or profit state. If it is in a loss, it does not need to pay, but if it is in a profit, it needs to.

VAT is a problem that cross-border e-commerce will inevitably encounter. VAT refers to value-added tax. Different countries have different VAT collection conditions and collection rates. The current tax rate is about 20%.

VAT is a post-sale value-added tax generally levied by EU countries, which is equivalent to the profit tax on the sales price of goods. If a cross-border e-commerce seller is doing business in the European market, he needs to register a local VAT tax number. After applying for the tax number, the seller needs to file a tax return according to the actual sales amount and the legal time. General taxpayers: VAT = output tax (sales tax) - input tax (import tax); small-scale taxpayers: VAT = sales * interest rate.

EU law stipulates that all sales by merchants, including online sales, have a basic tax-free amount, and other sales should be subject to value-added tax at the corresponding tax rate. So do cross-border e-commerce sellers need to pay taxes?

Shopee cross-border e-commerce is divided into two modes, one is the no-source mode and the other is the boutique mode. Both the no-source mode and the boutique mode charge a post-sales value-added tax, and the tax-free amount of post-sales value-added tax is 15 pounds and 22 euros. If it exceeds 15 pounds and 22 euros, tariffs will be incurred. In the no-source mode, the price of a single product is difficult to reach 22 euros, so it basically does not meet the tariff collection standard.

2. Shopee charging standards

Shopee platform does not require a deposit, and new sellers are exempt from transaction commissions for the first three months. After that, the commissions are charged according to levels. The first level is 3% per transaction, the second level is 4%, and the third level is 5%, which is considered to be the lowest among the current cross-border platforms. Originally, Shopee platform did not charge transaction commissions before April 17, 2018, but on the 17th, the official announced that it would charge sellers 5% per transaction and 1.5% for credit card payments.

In general, when selling goods on Shopee, only the Taiwan site and the Indonesia site have tariffs, and other sites do not have corresponding tax policies.