DIY Vat Taxes

Before you read this blog, please note I am not an accountant or a lawyer. If any advice is provided or inferred on this blog, it’s probably incomplete or wrong. I am simply a small business owner who, in order to attempt to stay compliant around the world, is writing this blog about my adventures registering and paying taxes in different countries and states. (Gripping right?)

If you’re still reading, perhaps you too have found yourself in the situation of being made aware that selling a single digital service (physical goods apply for a lot of countries too) to someone in the United Kingdom, Europe, India, Russia, Saskatchewan Canada (only that province), Mexico, South Korea, and a dozen or so other countries, will immediately trigger your need to register in that country and start paying Value Added Tax (VAT). Sell $59 over the course of a year to people in the UK? Gotta get registered and pay your taxes. Sound like a pain and want to pay some other service to do that for you? That’ll run you about $3,000 per year. Sometimes that includes them actually dealing with transferring money to the right place, sometimes not. And there in lies the problem, it’s simply not tenable to pay someone else to deal with it as a small business, leaving you with two options, one – ignore their ridiculous 0 threshold tax laws and risk paying penalties and fees in some years to come, presuming they catch you – or deal with registration and regular taxes yourself. I’ll note that I’ve inadvertently got away with not doing anything for multiple years in every country that I’ve sold to – but I don’t have a large volume in any country, and besides this blog is about trying to do the right thing and get into compliance.