Making Sure Your VAT Ducks Are In a Row on Amazon FBA with Claire Taylor

Michael MicheliniBusiness, Ecommerce, Podcast1 Comment

Are you selling in Europe? I don’t want to ask if you’re selling in UK or Europe – as that is still the same place right? Sorry, I won’t push any more buttons. Welcome everyone to episode 171 of Global From Asia, we have with us today the CEO and founder of SImplyVAT – Claire Taylor. I’m so excited to ahve her on the show – and another cool thing is – she is also a speaker at our upcoming Cross Border Summit! It is her first time to China as well, so I’ll do my best to take extra good care of her on her trip.

When this show goes live, it is literally a few days until the Cross Border Summit, we are working our behinds off on this one, 2 days this year (last year’s was 1) and just tons more to offer. This year, and last year, we had more requests for an online pass -we skipped it last year – but this year we’re investing in this! We will have a few benefits for online ticket holders – streaming in the conference, matchmaking with speakers and attendees, access to the recorded sessions, and added into our live Wechat group exclusive for the event. So we hope this is a good offer for those who can’t make it on the other side of the world for the event – you can get your ticket at

And without further ado, let’s get to the Claire interview.

Topics Covered in this Episode

  • Tell our audience a little bit about yourself?

  • Your Business

    When did you start, how you get started, what made you decide to start your own business?

  • Global E-commerce

    How does the popularity of global cross e commerce– rise of amazon etc. shifted your focus & your business?

  • Challenges

    What are the common problems/struggles that global ecommerce owners face when they have to deal with VAT in both the UK and EU

  • Expertise

    Your expertise lies in helping SME and multinational blue-chip companies providing VAT recovery and VAT compliance services

  • Global Clients

    What are the difficulties for you to have global clients in terms of culture and language?

  • Marketing to Global Audiences

    What are the most challenging parts to have global clients in terms of marketing to global audiences?

  • Tips

    You will be speaking at both the global summit in Hong Kong and also Cross Border Summit here in Shenzhen. Can you tell us some tips in terms of choosing the right conferences to go and building meaningful connections at the event

  • VAT Implications

    What are the VAT implications for “Using Fulfilment By Amazon to Sell into Europe”?

  • Contact

    What is the best way for our audience to reach you

People / Companies / Resources Mentioned in this Episode

Episode Length 27:22

Thank you Claire, I am really excited to meet you at the summit, as well as all the other listeners. Shout out to some of our more active online ticket holders – Marc Abraham and Chris Thomas – you guys are cool people and thanks for supporting the online ticket option and I look forward to chatting to you live from the online streaming! Anyone else – you can tune in live with us = and we’ll let you chat to Claire as well and see her speaking!

That is it – this is the last week I’ll be pushing this Cross border Summit – for a while – but don’t worry already planning 2018’s – have sponsors, speakers, and venue discussions going already. This is a great way to support this podcast, so input, suggestions, feedback, and hate mail is appreciated and noted.

Have a great rest of your week everyone – and wish me luck at the summit, peace!

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Podcast Transcription

“Import VAT would be charged but once the salary VAT registered, this import VAT can be reclaimed back through the VAT return.”

Welcome to the Global From Asia podcast where the daunting process of running an international business is broken down into straight up actionable advice and now your host, Michael Michelini.

Mike: Are you selling to Europe? I’m not going to ask specifically if you’re in the UK or Europe. I think that is really bit sensitive topic, right? Just an American guy here, I still don’t know what’s happening there. I’m got to push some buttons. Welcome everybody to episode 171 of the Global From Asia podcast. Today’s guest is a CEO and founder simply VAT, Claire Taylor. I’m also so excited to have her at the summit, she will be our speaker at our upcoming Cross Border Summit which is in just a few days from the air of the show and it will be her first time to China. So, I would do my best to take extra good care of her as well as other speakers and guests coming for the first time so when the show goes live. It will be Tuesday and I’m stressed out already just a few days before that. I’m always conferences and events are so much details and things to do with what. It’s our 2nd year 2 days long this year, last year was 1 day and we have just got a lot more to offer this year. It’s got to be much more fun-filled action packed valuable event. Last year, we had a great feedback which made us going to 2 days and also we got a lot of request last year for online tickets so I know there’s a lot of you maybe can’t make it over to China or Asia and listening and want to be involved with the conference so we do have an online ticket options for a special prize. So, what is the online ticket got to include? We’ll have streaming access to the conference investing in the equipment and figure have to do it. We have people helping on site. We also help match make you with the speakers and other attendees while streaming online. You have access to our recorded sessions in our private membership site for those that get the online ticket. And you will be in our live WeChat group in events and we’ll connect with the others and follow along as they chat. So I think that’s pretty valuable offer we’re trying to maybe we can do more online events and webinars and such in the future. And so, we hope you guys like it, feedback appreciated on it and you can buy the tickets just the offline regular tickets on the Alright, enough of that, I got to get back playing and my kids are jumping on my head right now. So, let’s get into interview with Claire.

Mike: Alright! Thank you everybody for tuning in to our Global From Asia podcast. We have with us Claire Taylor. She’s the CEO and founder of Simply VAT. How are you doing there, Claire?

Claire: I’m good! Thanks, Mike. We are all good here and it’s good.

Mike: So, we’re just talking before the recording and you’re preparing for your first trip to China in a less than a month now. So, you’re excited?

Claire: Yeah, really excited and I’ve never been. So, we’re going to Hong Kong and Shenzhen. So. we’re really looking forward to investing ourselves in the Chinese culture for a few days. It’s got to be really exciting.

Mike: Definitely! I think it’s getting more and more important globally, right? So, will get into that on interview but maybe firs,t do you want to introduce yourself and Simply VAT to our listeners today?

Claire: Yeah, sure. I’m actually been in international VAT for about 19 years now and we really enjoy helping online retailers and maintain successful and sustainable businesses to providing VAT compliance services. I’m an entrepreneur, myself, and this is my company. So, we enjoy working with a small businesses. I think that’s a lot of empathy there and understanding the pain and the hardships sellers go through to ensure the success of their online businesses. That’s a really little bit of business background and how Simply VAT was created it was really focusing on helping online retailers. Understand the EU VAT obligations and help them bring longevity into that businesses.

Mike: Okay, great! And yeah, I’m so happy that you’ve founded the business even though it’s 19 years. How about Simply VAT, your own business? How did you decided to venture of on your own? I’d love to hear a little bit of inside story.

Claire: Yes, sure. About in 2013, well, I always worked really hard for the people doing long hours. I should be able to do this for myself but actually coincided when just looking around and realizing in the VAT industry that nobody was speaking directly to the online retailer’s kind of simple terms, about the VAT obligations, and the online retailer in turn the city ticking time bombs. Because the court tax societies, release you penalties and interest charges for later on non compliance and ultimately they can shut your business down. But also the online retailers doesn’t have the luxury of the tax department and there was a lot of VAT’s, we wanted to give online retailers a place you know, go to place easily to understand information about what they need to know about the VAT regulations.

Mike: It’s definitely great! You saw the need in the market and thank you for helping out. I know a lot of our listeners are hustler’s entrepreneur’s sellers globally, trying to figure this stuff out and see a lot of this. So, I’m sure people have been welcoming you to the industry and it’s true I mean, the last few years especially has been globally growing with e-commerce. So, 2013 was that, how was the market then? I mean, that’s only a few years ago but still sure tons of even change in stand, you want to give us a little bit of overview maybe even before that it’s like I was in the Amazon FBA and all of these e-commerce giants.

Claire: Yeah, I think like e-commerce, it’s actually been around 20 years. I think the first legitimate online sales was the Sting CD saw that something called net market but you know in the last 10 years especially with Amazon and Ebay, especially in Amazon it’s kind of vision of getting goods to customers that’s really far, that’s really created quite a big VAT obligations for people using the Amazon infrastructure to get back. And I think in the last 2 years, especially for example the Amazon kind of use this service which was introduced 8 months ago, 9 months ago. Then it’s really starting to hot top in a lot of sellers and I was starting to realized that the tax qualities are camping down, that they need to take the VAT obligations seriously. I think that was a misconception, if you sell online, somehow you’re not beholding to the normal societies to taxation. And you would never think of opening up like a bricks or auto shop and not expecting to pay your VAT of what you’re selling to pay business rights etcetera. So that’s realization that will be slowly for the online sellers that they just got legitimate highly successful businesses and along with that comes obligation to pay your taxes. And especially in this new world of big data like it’s easy to data share the taxes are little savvy at any commercial business in obtaining data from Amazon and eBay and finding out who actually needs to register your places to hide. Especially, sorry to interrupt you but just the system focus has really been a marketing dream if you like as a business.

Mike: Yeah, I could imagine. So, it’s true we say like online sellers they think they don’t need to pay taxes like other businesses. I think there’s some saying right you can’t escape death and taxes, there’s like 2 things, you just can’t escape. I know a lot of listeners try to escape tax but it’s definitely getting harder to escape or avoid or dodge, I mean you can always you know, there’s always that fear to that it could come back to you later. So, people got to be careful, too.

Claire: Yeah, but when we talk to people, for us, our job is to take those sleepless nights away and stuff that nicking at the back of your head. Being like that one day a completely reason for being.

Mike: Exactly. So, alright. Let’s move on and that was scaring people as always (sighing) not people like, we’ll try to keep this changing. But I think the common struggle i think maybe is the education, maybe it’s the people the clients you work with or people you talk to they just don’t even know this or what are some common issues you found with the sellers coming into UK and Europe?

Claire: There’s a number of reasons. Some people have no idea. To be fair, Amazon it doesn’t really highlight the VAT obligation, they’re getting better active but it’s not there, pure business. You know it’s not there for business, their name appear, a lot of people don’t know they have got obligations. Some people are really clever in working on the system. And they do know, but they get away with being non-compliance. Another people do comply so there’s a real mixture. For us, it’s about educating and making sure people know at least I can like, and inform how they want to run their business as long as they get the full facts of the consequences.

Mike: Yeah, it’s true. People should just not try to get away with let’s say percent tax on their sales. What, you give some numbers? I know there’s differences. I think some people complain the complications of all these different countries and different rates and different ways to pay. Do you mind kind of give us an idea on how that works and what’s the range?

Claire: Yeah, that rates vary in Europe standards it varies from 17% to 27%. For the Amazon countries, Germany is 19%, Spain I think is 21%, Italy is 22%, UK is 20%. So it’s kind of hanging around the 20% mark. We always talk to people and say you’ve got to make sure that you got enough room in your margins to become VAT compliant. Make sure you got at least 20% VAT on your margins. Because if you have the VAT registered, and you haven’t done this, then you don’t have room. You just got to the see limitations in your business straight away but not being able to compete at all. So, it’s really highly important to understand that you got that. In terms of different tax society, filing with the tax society wants in their own language, they’ve interpreted the kind of 1 set European VAT with a different ways. It’s a variation on the theme. But you know they are pretty similar, but it’s just about understanding working again within the local culture and getting it right and getting on what they want. Obviously, it’s something that we provide for people.

Mike: Yeah, alright. So, let’s say you work with, I mean there’s some misconceptions and I don’t know if I even to blame sometimes there’s been information even I’ve seen on some comments on my blog maybe. But is there some limit’s, I mean some people think they don’t sell enough to have to pay VAT, is that, I believe that’s wrong, right? Everybody has to pay VAT even if you sell 1 British pound of product or is there like a minimum threshold?

Claire: Well, there’s a couple of things. It depends if you’re listeners say some of the goods getting from China and you’re sending one of goods direct to a customer when in UK for example. And you connect the customer, the important record and the customer will be responsible for the import charges. This isn’t always the best customer experience that the customer bought something obviously because they feel that this was cheap or the best value that they could get. And then before it turns out, DHL or UPS will send them an email saying you’ve got to pay at a no like 15 to 20 pounds extra taxes. And say a lot of the time, it could lead to returns and this customer not having a big business. But that’s one way when the seller does not have the responsibility for the VAT. However if the seller sending say goods from China to the Amazon warehouse fulfillment center in UK or any other EU country, that triggers an immediate need to VAT registered. There is no threshold to exceed, so as soon as you’re good to the setting that warehouse on sale, the seller should be VAT registered. And also, when the goods coming to the country and I example with UK the goods would come into the country an import VAT would be charged on this goods. But once the seller is VAT registered, this import VAT could be reclaimed back to the VAT return.

Mike: Got it. Alright, thank you for making that more clear. Yeah, it’s true. I know there’s, I’m an American so clear, I mean, in America like customers get upset if they pay for something and then they got notice from the post office they got to pay a fee and then message the seller, right and this could be risk of negative feedback or maybe even when they said in the terms or sales, obviously not a good experience for the buyer.

Claire: I think it depends on setting the expectation. What I did, I was got to buy telly, some iPhone cables on that day and I had to look in I was got to buy something but it was a Chinese seller something based in China. And then I was looking at it in February and it wasn’t got to be delivered till May, so I decided to choose something a bit faster delivery.

Mike: Yeah, it’s true. I think, I mean, actually seems like consumers online. I don’t know if there’s any stats are getting much smarter than they used to be, right? They used to just buy the first thing on the search results and click the buy button. I think now there’s a lot people having a data either, but just a thought that pops my mind is, they must be like you, right? They’re savvy enough to read all the details or the fine printer understanding more. People are much smarter now buying online.

Claire: Yeah, but I think Amazon are exploiting this with their business module in the fact they won’t sellers TT in the FBA, the fulfillment centers in Europe and this is to get the goods to the customers as quickly as possible. It’s one of the, people are always influenced by price than in quick delivery.

Mike: So, let’s go into FBA. Of course obviously, as we all know, FBA is kind of dominant force globally or Amazon in their FBA programs. So, I know people are always chatting about Oh I want to sell in Europe, but there’s a certain fulfillment center I should choose? Or they’re wondering if Amazon will help them or maybe we could specifically kind of give them some ideas to just start shipping some of their products from their Chinese supplier directly to Europe. What would have logo on FBA seller?

Claire: Sorry, what with?

Mike: Basically, what’s the expectation for the first time Amazon seller get into the Europe?

Claire: Obviously, from my point of view, I mean, Amazon reach its incredible and attraction it is getting, the sellers in European market is quite phenomenal. So, it’s really is a place to go to get your goods to your customers. From my point of view, if you can use Amazon FBA, they could have number of sources. The most recent being depend to your service. But the sellers have to understand all the fulfillment services are stricter and immediate need to VAT registered when you start in the European country you have to VAT registered there. So, depend to you. It require 7 VAT registration in place and it something like 64 VAT returns a year. And other reporting requirement such as no easy sales list and interest stat, which they use to monitor the minimum of goods across your country. So you know, if you go to Amazon seller center accounts like literally one tick box between you and the 7 country that obligations so you need to do to trigger the use of service. It’s really about the resellers understanding that obligations and recently there’s been a rush of Germans VAT registration because the German tax authority went to and said can I use your Amazon seller data. So, I said the tax authorities are really starting to use the modern kind of data sharing to be able to get on non-compliance sellers. So, I would suggest to doing it without understanding your VAT obligations and the cost involved.

Mike: Okay and then for the payments, is a payment after they sell, right? There’s no prepayments really?

Claire: For the VAT? No. The seller needs to make sure, in Europe, the VAT’s is part to the gross price. So the seller needs to make sure they’re setting the enough margin to be able to account for the VAT. So as you were selling 20% of what you’re selling, or 19% if you’re selling in Germany, etcetera. You got to need to pay that to the tax authority when the VAT return is due. In Germany VAT returns the due monthly and force them monthly. In the UK, they could be annually. So, you have to pay that over but first of all, you are offset it, you subtract any import VAT with you paid or on VAT purchases and it’s the difference that you need to pay to the tax authority. But you’ve got to make sure you have enough money to be able to pay them your VAT debt.

Mike: Make sense. So, then, how about your services? A little bit, how do you, can you give some people how much you’re, is it like a monthly service or consulting or just give people a bit of overview of how you can help them?

Claire: Yeah, well, we can provide VAT registrations and the VAT returns in importing all 20 EU country and other places like (blurred audio). We charge about VAT registration and then we charge per VAT return. We got a special package that will depend on you which is charge monthly. The other thing is non-EU sellers need to be aware that some EU countries require a non-EU seller to have physical representation which means the physical representative is somebody who is in that country. It will be jointly liable for the VAT that seller owns. And so, obviously they’re not got to know each other the physical rep want to have safeguard and want bank guarantee in placed and there may be higher fees. But one way to get around is to established for example UK Company and you will have UK company obligations like filing annual accounts and accounting for corporation tax in the UK for example. But if you do this you’ll be able to then negate the need for the physical representation obligation because you will have an establishment with the EU. But it’s just for the seller you know when there is a pay, you know what VAT clients is, but it’s really worth doing longevity to your business.

Mike: Yeah. Couple more points just kind of came up in my mind, hopefully it’s ok. Thinking about, of course, approaching a year since, I remember I was actually in Europe in Prague when they happened. That was like June, so we’re getting close to that year. I haven’t been following. Anything people, resellers maybe just business related. I don’t like politics too much but of course politics involved business. So, is there something sellers should be aware of, what is this whole brag of thing that happened in the future of that?

Claire: Yeah, article 50 which is the triggered yesterday so it’s now 2 years negotiation apparently. But it really is what’s got to happen, what trade deals that got to be negotiated. We might get to 2 years and say what’s that such a bad deal we want to stay in the EU? So, I would just say watch your ways at the moment. We’ve got 2 years of absolutely business as usual. Yeah so watch your space and when things unfold then we’ll keep up to date. Where in fact, the sellers for example, if we deal with EU it will stop the access to the single market. So instead of coming into the UK, and then access the single market from here, people would probably go into Island or Germany or France and access that single market as well as come into UK and just accessing the kind of make sure in setting the Ecommerce UK market. As well as establishing in another country to access the EU. So that’s what will happen. There will be an increase, slight increase cost of compliance. But people find way to get into their target market, it’s a global village now. So, I would just say watch your way and absolutely business as usual.

Mike: Very cool. Alright, Claire I appreciate your time and understand. Let’s, of course you got a great name, domain and business name, right? And is that the best way people can find you?

Claire: Yeah, absolutely, we just putting up a page in Chinese in honor to our visit to China. So that I will send that information to you. It’s not up yet and I will be up by that time.

Mike: Okay, great. I think once we’re online, it’ll be there. Will link it up on the show notes so people can easily get to that. Alright Claire thank you again and i look forward to meeting you at the Cross Border Summit and thanks for coming over on the other side of the world and I’m excited to see you.

Claire: Yeah. I still really looking forward to it. Thank you.

Mike: Alright.

Mike: Thank you so much Claire for coming out and sharing. I will see you at the summit. And I hope to meet a lot of you listeners as well. So shout out some of to my online ticket holders Marc Abraham in the UK, Chris Thomas down in Australia, you guys are awesome, thanks so much for supporting with the online ticket and others that has purchased. And your support online sharing the news, active on social media i really appreciate over the time. We’ve known each other. It’s just great the community building online and offline. So, I’ll talk to you guys on the online streaming you need to tune in to 2 days and anyone else you can tune in with us live at the show links are in the show notes 171 shows guys. The Summit is one of our main ways that we support this podcast so by buying online and offline ticket does go back into the development and fees on building this podcast and all this other things and of course supports me, you know. So hopefully you guys support what we’re doing and you know just make a little bit support by also giving you guys value back, too. So, check it out. Give us feedback it’s you know input suggestions and hate mail is always appreciated and noted. I listen and read everything so have a great rest of your week everybody. Wish me luck at the summit and I’ll see you next week. Peace!

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