Don't want to pay Vat anymore

[dropshipking]

Hi, Im a dropshipper based in Belgium and I am dropshipping to Sweden. (meaning people buy in my store and I buy the item on Aliexpress and have it send to them) Right now my company is based in Belgium, so I have to pay 21% VAT.

Right now I am looking to open a new company in Hong Kong to avoid paying VAT. And have my banking done through Cyprus because I read on this forum that its easy and quick with IBAN and Internet banking.

Can anybody give me some advise?

I don't mind paying income tax, but any extra possibilities with that also be great

 

[Martin Everson]

VAT returns brings in for Belgium over 3 times the revenue that corporate income tax does.

Just pay it, you really don't want the problems you will bring on yourself by avoiding to pay a major source of government funding.

 

[dropshipking]

VAT returns brings in for Belgium over 3 times the revenue that corporate income tax does.

Just pay it, you really don't want the problems you will bring on yourself by avoiding to pay a major source of government funding.

I get what you are saying but isn't it weird to pay VAT since my products are sourced from China, Im not even shipping anything from here in Belgium. Why should I even pay VAT? It is not illegal to have my company in HK instead of here locally. So I literally don't really understand the problem?

 

[curiousmarv]

If you are living in EU there is no legal way (even with all kind of subsidiaries constructions) to avoid paying VAT. Only half legal way is to get yourself out of EU and live outside EU. But even then you are supposed to pay EU VAT for EU sold products and if you are shipping physical goods you get all sorts of other problems then

I checked all possibilities myself once (for virtual goods). My recommendation: pay it instead getting yourself into trouble.

 

[JohnLocke]

If you don't incorporate a EU entity nor have your products or services send from any EU country it should be possible to avoid the VAT issue.

 

[W4rhol]

If you do dropshipping, you can use a UK or Irish company for avoid to pay the VAT because their law consider that you are just the middle man and not the guy who import the product.

I check that in 2016 but now maybe it's change.

 

[dropshipking]

I've set up a HK Limited company with HK bank account. Should be fine now right?

 

[W4rhol]

I've set up a HK Limited company with HK bank account. Should be fine now right?

Check with a tax lawyer for that. In my opinion you will receive a nice fine from the belgium IRS next year

 

[dropshipking]

Check with a tax lawyer for that. In my opinion you will receive a nice fine from the belgium IRS next year

Really? But what is wrong with this compared to setting it up in the UK or Ireland?

 

[dropshipking]

Also I want to add, In my terms and conditions I note that my customers need to pay VAT when they get charged for that at customs. Remember Im dropshopping from China. So if they get charged for VAT by customs and pay VAT to me they'd be paying double.. I also read at a Dutch forum that if I tell it to them like this it is 100% legal because otherwise I'd be letting them pay double.

 

[alnitak]

Also I want to add, In my terms and conditions I note that my customers need to pay VAT when they get charged for that at customs. Remember Im dropshopping from China. So if they get charged for VAT by customs and pay VAT to me they'd be paying double.. I also read at a Dutch forum that if I tell it to them like this it is 100% legal because otherwise I'd be letting them pay double.

who would buy stuff from a third-party company in another European country knowing that the stuff is coming from China? Why not buy it directly from Aliexpress? You don't help with customs and I imagine don't help with returns/warranty either. I can't understand this business model, what value are you adding?

Are you selling to seniors who can barely use internet and not understand where they are shopping from?

 

[diablo]

I don't get it, why don't you simply setup a offshore corp. in some tax free jurisdicition and which provides privacy.

 

[alnitak]

I don't get it, why don't you simply setup a offshore corp. in some tax free jurisdicition and which provides privacy.

I think in order to hide what his business actually does, he created a fictional company/business model while trying to ask the question. That's why this is not making any sense...

 

[Zappat]

I've set up a HK Limited company with HK bank account. Should be fine now right?

Can you send me a PM with info about this? I am very interested in opening a HK corporate + bank account, i also ship to customers in Sweden. What I’ve heard is that It’s very hard to open a HK bank account?