Online store taxation

What is Internet trading, taxation in Ukraine?

From the end of the twentieth century, more precisely, from the mid-nineties, the Internet began to develop intensively in the United States of America, which implied relatively fast, remote access to documents without the need to visit archives, libraries. Over time, approximately, at the beginning of the two thousandth, this so-called miracle began to be used throughout the developed world. All sorts of sites and search engines have appeared.

Online sales of goods and services have started. Every person with a computer was able to order everything that interests him without getting up from his chair. At the very beginning of this kind of retail, the state did not pay and did not even recognize the fact of the transaction without a contract and signatures, respectively, such relations between the seller and the buyer were not taxed. Especially, this applied to Ukraine and other post-Soviet countries. It was believed that there was only light, heavy industry and trade from the tray. But since 2011, after the entry into force of the tax code, a lot has changed. Online selling and taxation have become synonymous words. Now the government recognized and controlled online sales by charging payments to the budget. But this affected the official sites, especially those that were importers of electronics.

How does the taxation system of an online store work?

It is believed that it is quite easy to open an online platform. One has only to create a database, by hosting, a domain, stock up on products, spend money on advertising, and you’re done. This is partly true, but not entirely true. If serious work is planned with subsequent development, then it is necessary to create a legal entity. An individual entrepreneur or limited liability company is best suited. Setting up a joint stock company is expensive and does not make sense.

The taxation of the online store is as follows:

• The cashier records the fact that goods, services have been dispensed and that payment has been received on the company’s account;
• At the end of the reporting period, bookkeeping is brought together, revenues and costs are processed, net profit is calculated;
• At the end of a quarter or year, reports are submitted to the fiscal service and taxes are paid to the account of the treasury of the district or city.

If we consider that this procedure is carried out through electronic offices, then we can say that there is nothing complicated here. Other moments, such as a settlement registrar, simply record the fact that the seller has received cash, and the buyer has a document, it’s a check, which can be used to file a complaint with a local official.

What are the taxes on internet commerce?

To answer this question, you need to know which legal entity the entrepreneur registered. IE and LLC, the most convenient options for an online platform. But regardless of the form of business ownership, according to the law, you can choose only three taxation systems for an online store in Ukraine:

1. General! The firm transfers to the budget the same payments as an ordinary person after the withdrawal of capital or any other final profit. But if the company exceeds the established annual limit, then it is automatically transferred to VAT. The deductions go after the summary of income and expenses;
2. Value Added Tax! Such a system can be selected upon initial registration. It is interesting for those who have very high turnover, there are exports, imports, because it allows you to reimburse VAT when exporting goods abroad;
3. Simplified! Here, the online supermarket pays a single sales tax, if we are talking about the third group. Such a system is beneficial for those who have a large margin and average annual earnings. If a person has registered a sole proprietorship, then this is the most suitable option, but you will also have to pay a single social contribution regardless of income.

It is important to note that there are a number of other mandatory payments, for example, for real estate, rent, and so on. But this is already a conversation for a larger business.

How to choose a taxation system for an online store?

Businessmen create a company with a dual purpose. First, make money. The second is to sell the company and attract large capital, preferably foreign.

Let’s consider these options in more detail in order to understand where, what taxes will appear in the online store:

• We create a virtual platform only for making money for the family. It is easier to open an individual entrepreneur here on a single tax. Thus, a person makes a profit, pays single tax and single social contribution. But if an offer comes from an investor to buy a business, then only the resource itself can be sold, and the sole proprietorship will have to be closed through the district administration and the fiscal service. It does not sound pleasant, but since 2014 such a procedure in Ukraine has been greatly simplified, so that you can stop activities quite quickly and without serious penalties;
• We open an online supermarket in order to promote the resource, make the brand recognizable and sell the business at a good price. To do this, you need to register a limited liability company, become a VAT payer, register a trademark and redeem, if possible, all similar domains. It is also recommended importing a unique product from the manufacturer directly by yourself. If necessary, carry out licensing and certification of products. After taking over the market, the founder simply transfers 100% of the share to the new owner for a reasonable price. It is enough to issue the corresponding ACT with a notary, make changes to the USR, without additional memoranda and contracts.

Important! The company can be re-registered only after all debts are paid off by the company itself and personally by the founder. Otherwise, you can only attract an investor through an increase in the authorized capital.

Difference between online stores, taxes for them?

There are three types of online platforms for trade in goods and services. Each of them has a separate purpose and function. Each seller determines for himself what suits him best. It all depends on the volume and type of goods, services.

Types of online stores and taxes for them in Ukraine:

1. Online classifieds site. Here each registered user can leave their offer with product photos and contacts. In this case, the buyer contacts the seller directly, and they carry out the transaction from hand to hand bypassing the bank and regulatory authorities. This happens, for example, when reselling used household appliances. The site administration does not bear any responsibility;
2. Online store. As mentioned above, behind this method of sale is a firm that dispenses products in its own name and through a bank account. Here taxes are paid at the end of a quarter or year based on net profit;
3. Marketplace. This is an online resource that posts information about a product, a service of third parties, charging a fee for using their service, depending on the package of services. We can say that these are the very online ads, but mainly, on such sites, IE creates pages. In this case, the user pays taxes for the goods sold and the Marketplace from the profit that he collects from the customer for using the service.

Recommendation! Before registering a legal entity, choosing a suitable tax system, you will have to research the market, take into account the costs of creating a website, advertising. If you do not carry out these preliminary measures, and then it turns out that the business is not profitable, you will have to liquidate the company in accordance with the legislation, and these are additional and not small expenses.