Noob question..UK citizen providing a service to US Ebay sellers to avoid business tax

by JS1985
3 replies
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Hello everyone

This might be the most ridiculous question on here but please bare with me

Would it be possible for a UK citizen to team up with a large US Ebay seller and sell products from the UK for them and transfer the money via different means other than paypal in order for the US seller to save on tax?

Would this be attractive to a US seller ? And what sort of rate could someone in the UK charge for such a service?

Hopefully I worded that correctly
#avoid #business #citizen #ebay #noob #providing #questionuk #sellers #service #tax
  • Profile picture of the author dave_hermansen
    I'm not sure what the question really is here. What tax is being saved? Businesses do not pay sales tax; customers do and only customers that are located in the same state where a business has a sales tax nexus.
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    • Profile picture of the author JS1985
      Originally Posted by dave_hermansen View Post

      I'm not sure what the question really is here. What tax is being saved? Businesses do not pay sales tax; customers do and only customers that are located in the same state where a business has a sales tax nexus.

      Hi Dave many thanks for taking the time to reply

      I was under the impression that US businesses were taxed based on what their end of year profit showed? I could be totally wrong here
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      • Profile picture of the author dave_hermansen
        Originally Posted by JS1985 View Post

        Hi Dave many thanks for taking the time to reply

        I was under the impression that US businesses were taxed based on what their end of year profit showed? I could be totally wrong here
        It really depends on how the business is set up. Most people set up as sole proprietors, LLCs or S-Corps, all of which normally get set up as pass-through entities to their personal income taxes.

        Unless you are advocating some sort of tax dodge where people do not report their personal income, I guess I don't see the upside, unless you are talking about an advantage until the IRS figures out that your spending does not match your income and you get thrown in jail.

        There may be some sort of advantage for true corporations, but I know I would be talking to a CPA and a tax attorney before I entertained any sort of situation that gave me a tax break.

        Incidentally, to answer a part of your question I initially neglected, most people pay an effective federal income tax rate, after deductions, of somewhere around 12-15%. Most states have income tax, too, and that rate is all over the place. Whatever you charged, if you could find enough people willing to roll the dice and break the law, would have to be enough to make a major dent in that income tax while also covering the cost of payment processing and eBay fees. Usually, those processing fees are far lower in the U.S. than they are in the U.K. Then, you have exchange rates and transfer fees to consider. And, of course, there sure has to be a whole lot of trust on both sides!
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