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employed / sold trader help

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  • 05-02-2018 6:26pm
    #1
    Toogood12
    Registered Users Posts: 2 ✭


    Hi there, I am new here I am hoping you can all help me.

    I have a quick question with regards to tax. I am currently in a job where my salary is €33,500. I am employed but looking at opening as a sole trader on the side. I will be importing from China into Dublin, I will paying 3% duty on import and 23% import tax.

    My question is first of all how does sales tax work after that? Do I pay 23% tax again on sales? Or 40% on profit because I'll be over 34,000 including my salary. For example let's just say the unit is €7 after import and duty it's €10 for example, I sell for €25 do I have to pay 40% tax on the 15 euro profit after paying the 23% import tax as well? Sorry if it's confusing..


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    #2
    Lockedout2
    Registered Users Posts: 402 ✭✭Lockedout2


    Toogood12 wrote: »
    Hi there, I am new here I am hoping you can all help me.

    I have a quick question with regards to tax. I am currently in a job where my salary is €33,500. I am employed but looking at opening as a sole trader on the side. I will be importing from China into Dublin, I will paying 3% duty on import and 23% import tax.

    My question is first of all how does sales tax work after that? Do I pay 23% tax again on sales? Or 40% on profit because I'll be over 34,000 including my salary. For example let's just say the unit is €7 after import and duty it's €10 for example, I sell for €25 do I have to pay 40% tax on the 15 euro profit after paying the 23% import tax as well? Sorry if it's confusing..

    The 23% is VAT on imports. I’d you are not registered for VAT then you don’t have to charge VAT on the sales and can’t reclaim the VAT.

    Income Tax is charged on the profits of the business so it’s the sales less the cost of sales less the admin expense.


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    #3
    StupidLikeAFox
    Registered Users Posts: 7,711 ✭✭✭StupidLikeAFox


    23% is VAT. Your imports will cost you cost price + delivery + duty, then VAT is charged at 23% on top of all of this. If you are registered for VAT you can claim back this VAT which you have paid, but you must also incorporate VAT into your selling price. If you are not registered for VAT you can't claim it back and you can't charge VAT on your sales.

    Outside of VAT, you will also need to pay income tax. At the end of the year you will work out your profit (or loss). When you are doing your tax return you will declare your all your income (PAYE and side gig) and pay your tax on the sum of that. Some of this will obviously be already deducted at source through your employer. At your salary you will basically have to hand over around 50% of any of your profits.

    This is a very high level overview so you would be well advised to book an hour with an accountant. This will be bread and butter for them.


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