Shopify Dropshipping Taxes etc in Ireland

SeanJK

I'm thinking of getting into dropshipping via shopify. It's definitely a very popular thing lately. I've done a lot of research on it so i know a fair bit about shopify and dropshipping itself. The issue is the people are generally from America so they're business & tax laws will be different.

I'm wondering do I have to set up a official business to do dropshipping?

How would I pay taxes, do I self assess at the end of the year?

Just slightly confused when it comes to that for the fact everything is done online and I psychically do not touch products ever.. I'm just a middleman.

Side note - I might also do this on eBay too but i'm presuming the method is the same regarding tax.

Any helpful answers will be appreciated.

Thanks!

Mrs OBumble

What are your products?

I do a bit of this, with books sold via Amazon and some printed goods sold via Etsy: it's best to think of yourself as selling <<whatever>>, and that remote manufacturing (to your design) and fullu outsourced dispatch/delivery is simply how you operate. That helps you understand the business model.

Register as a sole-trader with Revenue. If there's any risk of your being sued and so losing your house, then consider sitting up a limited liability company - you need to do some more research than just asking in boards to find out your responsibilities if you do that.

Keey an eye on the VAT threshold: if there's any chance you might reach it, consult with an accountant on how to manage your business so your tax responsibility are met.

SeanJK

The products that I would be shipping would be small and light.

It could range from anywhere from fashion/technology accessories to clothing.

Would be typically light items to have little to no shipping costs.

And also that would kind of cancel out the fact of being able to be sued.

My question is though how do I report taxes?

Do i self-assess at the end of the year?

And as far as i'm aware I don't have to pay VAT for import items as the buyer pays for that.

L.Jenkins

Have a look here. https://www.revenue.ie/en/vat/goods-and-services-to-and-from-abroad/distance-sales/index.aspx You might also want to look into how VAT is handled with respect to countries outside of the EU.

The link I've shared shows you the thresholds and anything below that, you pay VAT on sales within the EU to Revenue here in Ireland. Above these thresholds and you pay VAT to what every Country you're shipping to.

As for the US and some Countries outside the EU, as far as I'm aware, you don't pay VAT, but you will have to pay tax on your earnings.

Mrs OBumble

SeanJK wrote: »

The products that I would be shipping would be small and light.

It could range from anywhere from fashion/technology accessories to clothing.

Would be typically light items to have little to no shipping costs.

And also that would kind of cancel out the fact of being able to be sued.

My question is though how do I report taxes?

Do i self-assess at the end of the year?

Yes: you register as a sole trader, and you self-assess.


The products being small and light does not remove the risk of being sued. A small light thing with an electrical fault can cause a large fire ... etc.

Most shipments will have a minimum charge: one of the producer/distributor firms that I use charges postage at X per item plus €5 per order to cover the order admin. So someone who buys 20 items find the shipping cheap, someone who buys only one finds it expensive. Yes, this does slow down sales - but it's the only way I can manage to operate in this niche. (Merchandise sales is a very small component for me, most of my income comes from my day job.)

LiveRadio.ie

Mrs OBumble wrote: »

Yes: you register as a sole trader, and you self-assess.


The products being small and light does not remove the risk of being sued. A small light thing with an electrical fault can cause a large fire ... etc.

Most shipments will have a minimum charge: one of the producer/distributor firms that I use charges postage at X per item plus €5 per order to cover the order admin. So someone who buys 20 items find the shipping cheap, someone who buys only one finds it expensive. Yes, this does slow down sales - but it's the only way I can manage to operate in this niche. (Merchandise sales is a very small component for me, most of my income comes from my day job.)

Happy that you found a good dropshipping partner. I could not find a good partner so I quit thinking about dropshipping.


Also you need to think very hard how to advertise your shopify shop. Very hard to compete in SEO world. Will take years for you.