Dropshipping from Free trade zone + company in tax haven
Dear All,
we own a trading company in a tax haven from which we send low weight items 30g-50g-100g to costumers around the world. We take advantage to the low tax regimen for offer a competitive price o our costumers.
Our problem is the relative high cost of shipping and slow delivery.
Currently our postal rate is 0.85$ for worldwide shipping for 50g letter, our costumers pay about 3.5$ for the product and our product cost + overhead for each item is about 2$ leaving us with a 0.65$ net profit/item.
Product Cost: 2$
Shipping: 0.85$ (7days-50g)
Retail:3.5$
Profit:0.65$
Now i am taking in consideration to use a Free Trade Zone in europe (close to our main costumer base) which also has a very low shipping cost.
So the product will go directly from our supplier worldwide to the FTZ and there packed and posted to our final costumers. Moving our deposit/packing facility wont affect our product cost.
Product cost: 2$
Shipping: 0.4$ (3 days 50g)
Retail:3.5$
Profit: 1.1$
The question is when selling from a FTZ to direct costumers outside the nation where the FTZ is located should i pay VAT or other taxes to the nation where the free trade zone is located or i do still apply the tax rate of where our main company office is located (tax haven)?
In theory the FTZ is like a zone outside the customs which doesent apply any taxes to what is re-exported but i am not sure if this applies to sales to final costumers.
Thank you.
we own a trading company in a tax haven from which we send low weight items 30g-50g-100g to costumers around the world. We take advantage to the low tax regimen for offer a competitive price o our costumers.
Our problem is the relative high cost of shipping and slow delivery.
Currently our postal rate is 0.85$ for worldwide shipping for 50g letter, our costumers pay about 3.5$ for the product and our product cost + overhead for each item is about 2$ leaving us with a 0.65$ net profit/item.
Product Cost: 2$
Shipping: 0.85$ (7days-50g)
Retail:3.5$
Profit:0.65$
Now i am taking in consideration to use a Free Trade Zone in europe (close to our main costumer base) which also has a very low shipping cost.
So the product will go directly from our supplier worldwide to the FTZ and there packed and posted to our final costumers. Moving our deposit/packing facility wont affect our product cost.
Product cost: 2$
Shipping: 0.4$ (3 days 50g)
Retail:3.5$
Profit: 1.1$
The question is when selling from a FTZ to direct costumers outside the nation where the FTZ is located should i pay VAT or other taxes to the nation where the free trade zone is located or i do still apply the tax rate of where our main company office is located (tax haven)?
In theory the FTZ is like a zone outside the customs which doesent apply any taxes to what is re-exported but i am not sure if this applies to sales to final costumers.
Thank you.
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