Site flipping & taxes :(

Discussion in 'Site Flipping' started by dbyrn, Jun 6, 2012.

  1. dbyrn

    dbyrn Power Member

    Feb 20, 2010
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    helping people
    I know, I know. Taxes are not sexy at all. But if you want to go big you have to consider them.
    I've got a question for the experienced site flippers from European Union (VAT!!!):
    What taxes do you pay and where is the VAT involved (if it is needed) in the following scenario:
    1. I'm buying a website on flippa. The seller is non EU.
    2. I'm investing X euros in the site.
    3. I'm selling the website on flippa. The buyer is non EU.

    How does it change when the seller, the buyer or both are from EU?

    Thanks a million in advance!

  2. Lithin

    Lithin Regular Member

    Dec 12, 2011
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    It really depends on which country you are from.

    In denmark it is all about the surplus of the money you are making.

    Lets say you spend 1k (incl. salestax) Euro on a site. You then want to flip it for 2k euro. The buyer in the other country needs to register with a company in the non-euro country and then he can pay the salestax in his country. If he doesn't have the country it's not business 2 business but suddenly business 2 consumer. Then you gotta add the given salestax on the reciept.

    To explain it more here is 2 scenarios.

    Scenario a. The seller is from US, you are from EU and the buyer is from the US. all owns their own business.
    You buy the site - as a business - without the salestax, when you flip it to the buyer from the US, its his responsibility to add the salestax to their gov. When dealing B2B no salestax is incl.

    Scenario b. The seller is from the US, you are from EU and the buyer is from the US. The buyer is a customer without their own business.
    You buy the site - as a business without the salestax, you then flip it to the buyer and add the salestax - you then pay the salestax to your gov. When dealing with private people there is a salestax included.

    I hope this answers your question

    EDIT: oh and always contact your tax office. They are most likely more than willing to help you make sure that you don't get smacked in the end.
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  3. Nargil

    Nargil Jr. VIP Jr. VIP

    May 10, 2012
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    It just depends whether you are from European Union or not, it doesn't matter which country, principles are the same. because this entire selftaxing VAT is made by EU directives. However the % depends on the country. I can't post a link, but there is a great article on weekeepeedia.
    However this VAT directive already applies, if you are accepting or providing a service from any other country. If you afe from France for example, it doesn't matter whether you order service from USA, Spain or Sweden, you have to apply the VAT, because it's outside of your country, France.
    So all in all, it doesn't matter whether you are selling/buyiung services/goods from EU or USA, only thing relevant is whether this deal takes place in one EU country or not.
    But for closer information, just contact your tax office, just as Lithin says.
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