Taxes & Export: How to open your eBay business to the world
Are borders a barrier? Not for your business! Taking the step into international selling is easier than you might think.
In this episode, entrepreneur and consultant Jenny Nittmann from Nitt & Huff in Berlin gives you tips on how to open up your eBay assortment to buyers around the world – with very little know-how.
Jenny explains which tax basics you should keep in mind, what you need to know about shipping abroad, what support eBay offers you, and how to sell your products internationally successfully.
In short: fewer hurdles, more opportunities – entering the international business is not hard! So tune in now and get started internationally!
**Important Links**
- Free whitepaper on international selling (https://www.ebay.de/sml/whitepaper-internationalverkaufen)
- eBaymag (https://ebaymag.com/)
- More information about eBaymag (https://www.ebay.de/verkaeuferportal/umsatz-steigern/international-verkaufen/ebaymag?targetgroup=B2C)
- eBay for Business on Facebook (https://m.facebook.com/cookie/consent)
- eBay for Business on Instagram (https://www.instagram.com/ebayforbusiness_deutschland/)
- More info on the eBay podcast “Alles top. Gerne wieder!” and our podcast hosts (https://www.ebay.de/verkaeuferportal/news/podcast)
** Mentioned podcast episodes**
- This is how international trade with eBaymag & Co. works (https://open.spotify.com/episode/38d1jOGq6XD4WtbmPBPKOl)
- EU-wide trade without tax disputes? Here’s how! (https://open.spotify.com/episode/0UCO3uD7FWooHMBWBcdWTZ)
** Chapter markers **
- 00:00:00 to 00:03:23: Intro
- 00:03:23 to 00:05:59: The first step to international selling: the 5 Ws
- 00:05:59 to 00:07:33: Typical fears and hurdles in international trade
- 00:07:33 to 00:09:17: The OSS procedure – an important relief for merchants
- 00:09:17 to 00:16:24: VAT on international sales
- 00:16:24 to 00:21:22: How do I find the right target country for international selling?
- 00:21:22 to 00:28:12: Customs: What do I need to keep in mind for international deliveries?
- 00:28:12 to 00:29:22: Final tips for getting started in international trade
- 00:29:22 to 00:30:54: Outro
Isabell: Getting started in international trade is complicated? It doesn’t have to be! In this episode I talk with Jenny Nittmann about how you can get into international trade and, in particular, which things you should pay attention to around taxes and customs duties. We talk, among other things, about the OSS procedure and about which things you should clarify with your tax advisor when getting started. So: sticking around is worth it!
Jenny: You basically just have to look at how much do I sell to whom? And that brings us to my five Ws, which I have in my head. That’s my red thread when I talk about international selling or when I’d go to a tax advisor with questions, I’d always ask myself: what am I selling to whom, where to, and how much of it? Because while within the EU we are regulated relatively uniformly in terms of VAT, there are still certain key points according to which certain things are declared, sales of goods are reported, and also certain "thresholds" up to which I don’t have to do certain things or from which I have to do certain things.
Isabell: Hello and welcome to "Alles top. Gerne wieder!", the eBay podcast all about trade and e-commerce. I’m Isabell Butterwegge, and today it’s all about international selling and the maybe not quite so sexy-sounding topic of taxes. But don’t worry, I also have an expert with me who will guide you clearly and concisely through the actually not that complicated world of tax requirements: Jenny Dittmann from Nitt und Huff in Berlin was herself part of a marketplace tax team for a long time and also worked on various marketplaces such as Amazon, PayPal, and eBay, and has been supporting merchants as an entrepreneur and consultant for almost three years on process-related questions. And more recently increasingly on electronic invoices and tax technology. Her specialty: everything around indirect taxes and the question of how you can successfully overcome hurdles when selling abroad. With over 20 years of experience, she brings a wealth of practical knowledge to today’s episode. So first, a warm welcome, Jenny! Great to have you with us.
Jenny: Thanks for having me here, Isabell. Good morning.
Isabell: Jenny, before we dive straight into the topic, I’d like to know from you, when you come into the office in the morning and open your laptop, what are the first programs you open?
Jenny: Yeah, I’m extremely boring. Slack, Outlook, and LinkedIn pop up right away for me. And those are the three programs I open in the morning and consume immediately. There’s really nothing more exciting to tell.
Isabell: But I’d guess Outlook is probably one of them for most people. If we’re talking about international selling now, there are many who are thinking about getting started with it. And of course it’s kind of a no-brainer. If I can reach more customers, I also have a better chance of making more sales. What, in your opinion, is the first thought I should have if I’m considering selling internationally?
Jenny: I would definitely say, like Nike, "Just do it." If you pay attention to a few things, stick to a few things, and inform yourself well, it’s a really great thing. We’re lucky to be in the EU. In the EU there are no internal borders anymore. So all member states have, so to speak, opened their national borders for the free movement of people, services, and goods. That means, for example, that we can sell duty-free within the EU, that we don’t have to do certain things within the EU and don’t have to take certain routes that sellers from outside the EU selling to us or that we as sellers to non-EU countries have to consider. So the first thing is to be happy that we are in the EU single market and can trade here duty-free across national borders with other EU member states. The next thing I’d say is that I first need to look at what I’m selling. Is it things I can touch? In our jargon, that’s called "goods." So everything you can touch, physical things. And then of course there is the huge services sector, which knows even fewer borders. Especially thanks to the wonderful internet, the possibility of downloads, streaming, etc. So first I look at what am I selling? And then I’d say I think about what makes sense for me? Which country makes sense? In which country do I perhaps speak the same language? That naturally brings the DACH region to mind right away. Quick tip: Switzerland is not in the EU, so you always have to keep that in mind. But Austria, for example, is a classic. Then of course there are neighboring countries right on our border where many people speak at least the local language plus German. I’m thinking of the Benelux countries and also France. So in Germany we’re also lucky to be surrounded by many interesting neighboring countries to which we could all sell. So first of all, the question is what am I selling, and where can I relatively easily sell my goods in terms of language?
Isabell: That makes perfect sense! And I’d say for today’s episode we’ll focus on the case that we’re assuming someone is selling goods. I think that applies to most of our listeners at least. Even though services can apparently be a bit easier too. You’ve been dealing with international trade for a long time. What, from your experience, are the typical reasons why merchants are still hesitant to get into international trade?
Jenny: Yes, that’s the classic. I was lucky enough to be able to speak about this topic at eBay Seller roadshows back in 2013. And it’s a red thread that has continued ever since. And that really is the fear of taxes, of the administrative, i.e. bureaucratic, hurdles. And I’d love to help lower those a bit, to give a few supports, tools, and resources. I think if you know what you need and what you should know and what information you have, and then go to a really good tax advisor with that, then the actual selling should really be easy. And especially on marketplaces like eBay, where there is incredibly much support for sellers, lots of information on your help pages about a wide variety of international topics or CBT as it’s also called, Cross Border Trade topics, I can really only say: it’s not bad at all and it doesn’t hurt, and you open up a great market for yourself. And the supply chains should actually be easy too.
Isabell: Exactly, how the whole thing works at eBay, I’d say we’ll park that for a moment and come back to it later. You just said that, of course, within the EU there are no borders. That means getting started is easier there. And for some years now there’s also the so-called OSS procedure, the One-Stop Shop procedure. We already had a podcast episode about that, and we can add it to the show notes again. But maybe you can briefly outline what that actually means, because I think it’s an essential part we should look at again.
Jenny: Exactly, that’s a super, super good point. The EU legislator wants to make it much easier for merchants within the EU to handle these VAT issues. And so they thought, aha, it makes total sense if I could declare my sales to private individuals, which I make from my country to another EU country, through my own central declaration. That means I no longer have to go into every country I sell to, get a VAT ID there that starts with FR for France or PL for Poland or AT for Austria, but instead I can declare my private sales through this One-Stop-Shop or OSS declaration here in Germany. And that’s a great thing. You just have to, I’m putting this in quotation marks here, of course look at how much do I sell to whom? And that’s where we’re at my five Ws, which I always have in my head. That’s my red thread when I talk about international selling or when I’d go to a tax advisor with questions, I’d always ask myself: what are my five Ws? What am I selling, to whom, where to, and how much of it? Because while within the EU we are regulated relatively uniformly in terms of VAT, there are still certain key points according to which certain things are declared, sales of goods are reported, and also certain "thresholds" up to which I don’t have to do certain things or from which I have to do certain things.
Isabell: Do you have an example of that?
Jenny: So if I sell shoes, for example, then the first question is already answered: I sell shoes. And then I also know, when I go to the tax advisor, aha, this is not a service, but goods. Then I think about to whom. VAT is actually really simple, that’s why I can do it too. You only ever distinguish between private customers and business customers. In technical terms, that’s either selling to a consumer or a "C" or to a business, a "B". Then where to? So what’s the destination country? The how-question points clearly to the supply chain. So where do the shoes come from? Do I have them in a warehouse at my location here in Berlin, for example? Or do I have an external location, maybe even in another EU member state, because I want to keep my delivery routes short. So where do they come from, where are they going, and to whom? And then the question, how much? Am I selling under €150 per package, am I selling over €10,000 per year? So you have to look a bit at how much revenue am I making? Exactly, and then I basically already have everything I need to talk to my tax advisor, if I need someone to set this up properly for me, about the right approach from an administrative perspective.
Isabell: And what exactly does my tax advisor do when you say they set it up properly? What exactly does that mean?
Jenny: Yes, great question!
Isabell: Or is there some kind of quality criterion I can apply myself?
Jenny: So I would ask my tax advisor: what do I need to do? Is it enough if I register for OSS and then simply add, in my VAT advance returns, which I have to fill out anyway for my sales within Germany, what I sold to private customers in other EU countries? Then they say, yes exactly, but what about your business customers? It may also be that I have shoe stores that want to buy my shoes. And then I’d say, aha, how does that work then? And then, for example, they’d tell me, oh, with a business customer, you don’t have to charge them VAT; if your goods come here from Berlin, you issue them an invoice without VAT and they declare the tax themselves under the so-called "reverse-charge procedure." So my tax advisor should be able to tell me exactly, based on my situation, what VAT obligations do I have to meet? As I said, from the declaration to invoicing, be able to cover everything.
Isabell: And can I assume that if, let’s say, I haven’t sold internationally yet, I probably have a local tax advisor, should I assume that they also basically know about my international taxes or is that not the norm?
Jenny: I think in practice that’s not the norm. There are certainly differences. I would definitely knock on that door first. And there are also many who specialize in it and may have one or two practical tips. But I think, Isabell, you at eBay also already have really great tools in your toolbox where you can at least read a bit about what you should be thinking about. For example, the listing options: if you want to sell in other EU countries, marketplaces let you say, aha, I’d like to make my listing available in certain countries, etc. So yes...
Isabell: Maybe we can now briefly talk about how, at eBay, you can make listings, as you just said, available internationally. We have this passive and active option to basically go to the marketplaces or the other country sites. Can you briefly summarize those again?
Jenny: Yes, I hope I get it right. Feel free to correct me. Exactly, passive means you list on the ".de" site and then customers from other EU countries can see your listings. And then you can basically say, yes, I also ship to Austria or yes, I also ship to Poland. Through your listing you create visibility in other countries, and of course it makes sense to see whether they can understand my language when they see this listing there. And then you can also restrict that. I think that’s the first point.
Isabell: Exactly, that’s the first point. And in some cases, the listings are even translated too, at least the titles, exactly.
Jenny: Thanks AI! Exactly, and active listing is actually that you say, hey, I’d also like to proactively list my goods on international eBay sites and then not on the ".de" site, but maybe on the ".com" site, or wherever I feel like selling. So eBay gives you the option to precisely control and steer how you make your listings visible and in what way.
Isabell: Exactly, and that mainly has the advantage that I can also control prices better, besides the full translation of course. What about the different tax rates within the EU? Do I need to pay attention to anything if I sell internationally within the EU, or is it basically almost irrelevant thanks to the OSS procedure? Can I just keep going with my 19% basically?
Jenny: Wouldn’t that be nice, since in Germany we naturally also have a nice low tax rate. So, you’re bringing up a very important point. If I sell my goods to a private customer in another EU country, then the tax rate of the destination country applies. So you really do have to check: do I know at what tax rate my specific product is sold in the other EU country? There are special cases, for example books sometimes have lower tax rates than the standard rate. But it’s assumed that most normal goods you sell are subject to the so-called standard rate, and that varies across the EU. In Luxembourg, for example, the lowest tax rate is 17%. In Germany, with 19%, we’re also really in the lower range. If I sell to Hungary, I have 27% on a standard laptop, for example, or a pair of shoes, if we stick with the topic, or in the Nordic countries, Denmark, Sweden, we’re also at 25%. So it’s very important to factor in the correct tax rate. Because the price my end customer sees on the listing is the price they also pay. And if I don’t account for the fact that I have to remit 27% tax in that price, then mathematically it’s clear my margin goes down. So I should look at where I’m selling, what the tax rate is, and accordingly know, aha, it’s probably more than 19%, exactly.
Isabell: And ideally I get that information, how high it is, from my tax advisor too?
Jenny: Ideally from the tax advisor. But you can also really ask the internet, and the EU websites or your trusted tax advisor.
Isabell: Okay, how do I find the right destination country for me?
Jenny: Yes, so for me it’s again about looking at language: can I imagine that customers there will like and want my product? So does what I’m selling even fit there? Exactly, and then things like tax rates would probably be secondary, because I can simply plan to build them into my prices. And for me that’s a pass-through, neutral item. And then, how do I get my goods there? So if I assume that I only have one location for now and it’s probably here in Germany, then I also need to think about my delivery routes. And that’s where our service providers come in, sending the packages for me. And then I just need to know what I’m putting in, how much it’s worth, in order to choose the right package size, etc. accordingly and ensure it arrives properly in the destination country.
Isabell: Yes exactly, I think language is the one big thing that should be considered. We now also have an internal tool called "eBaymag." There I can actively choose the international sites too, and as you just described, I can basically just add the shipping and the tool then translates everything fully. And there I can also adjust the prices again, which... yes, may not be the decisive factor that VAT is different in one country, but as you just said, the margin still has to work and I of course still have to be competitive in the target market. Exactly, I can also achieve that via "eBaymag" by adjusting my price there and the VAT, which is very practical.
Jenny: Super practical and makes sense. Otherwise, otherwise it hurts, so...
Isabell: What would you advise merchants, based on your experience, who are too afraid of all the bureaucracy? As you’ve described it now, I’ve discussed my current status once with my tax advisor. I’ve chosen a destination country, probably initially within the EU because of the borders, dealt with tax rates, adjusted my prices, clarified translation. What other hurdles should I keep in mind?
Jenny: Yes, I’d really say: use technology to simply see how it goes. Find a site or find shipping routes that you can control well at first, where you can try a bit to see whether someone maybe orders your goods to Austria or to neighboring countries. And maybe try it first with one or two passive listings, where you can specifically say that’s where I would ship to. And then you can always expand that over time. And I’d really say keep an eye on it. It’s not something you should do on the side if it’s meant to grow. So it’s certainly good, and I wish everyone great international sales success, that they eventually have someone who really manages it proactively and then from shipping to the values that end up on your OSS declaration, because that really is the easiest way to declare these international sales within the EU, that everything fits and is internally consistent, that it’s all correctly recorded in accounting. So my thing is observe, try it out, and yes, then it works...
Isabell: Ideally! If merchants have now decided to sell internationally within the EU and also take part in the OSS procedure. What final tip would you give them for getting started?
Jenny: So first: congratulations! I think it’s great when that step is taken! And then simply do it and of course keep good records of everything. That’s just what the tax authorities want. Also, and I’d really point this out, the marketplace itself—your listeners have probably heard this many times—is obligated to simply collect and report data. And I would recommend to all merchants, at home in their accounting, to look closely at what I’m selling, where to, for what revenue? When did that happen? So fulfill my record-keeping obligations. But you do that anyway when you keep accounts. And then I’d say: yes, try it, monitor it, meaning observe and report, and everything else will fall into place.
Isabell: That sounds very, very good. You just said the marketplace is obliged to certain things. And that applies not only to reporting obligations. For example, when I sell to the UK, we are also obliged to collect and remit VAT. I think it’s the same for some other countries outside the EU too. And that is of course also an exciting case if I want to sell beyond the EU borders, which of course also comes with a lot of potential. Maybe you can briefly describe the cases again. What does it look like if I want to sell to the UK or Australia, for example?
Jenny: Yes, that’s a great question. There are also facilitations there, because the marketplace, the platform on which I sell, is also held responsible in many countries that are not in the EU. And I think that’s a huge relief for sellers. So the marketplace in Australia, the marketplace in the UK, says: listen, I’ll take over the declaration of import VAT for you. I handle this import on your behalf and then I basically sell in the destination country into which the goods are imported for you under the so-called "collect and remit procedure," I’m using the Denglisch term. That’s the common term. And that’s really something that already exists in many, many other countries today. So I already mentioned Australia, for example, a country that is also very suitable for international trade because of the language. And there, marketplaces are already taking over a lot of the responsibilities that merchants used to have. I mean, to conclude that point, I can of course also say I want my customer in that country to pay import VAT upon package handover at the door. I don’t know how good the buying experience is then, so to speak. Personally, I didn’t like that at first when it came that way. I thought it was better when everything was already settled. But the marketplace can also show you a lot through the help pages about what works how.
Isabell: So if I now decide to sell to Australia, I don’t have to register for VAT locally, I can basically just start selling, but of course I should look into import duties again?
Jenny: Exactly, I’d first bring these five Ws back to my tax advisor, because especially with goods it’s important where they come from. So if I don’t have a location in Australia and I sell through a marketplace, it could very well be that the marketplace takes care of many things for me in that case. So I would definitely check my circumstances first. Of course, it’s a long shipping route, and if at some point someone has opened such a great market for themselves in Australia and has goods there locally, that’s of course a different story. But in general, if I send my packages to Australia through a marketplace, it should already be much easier today than it was, I don’t know, ten years ago, when I first spoke with you about this topic.
Isabell: That’s nice when there’s such a positive development.
Jenny: I think so too.
Isabell: So my tax advisor can then also help me with all my customs questions, possibly... or should be able to?
Jenny: Exactly, should be able to. So this is a topic where, especially in the countries where the goods are going, you have to look at what I’m selling there. If it’s electronic products, what are the return rules, etc. There are of course other requirements that also need to be looked at. Packaging questions, I don’t know, power outlet questions. Not all of our European plugs fit, etc. That probably goes beyond my knowledge. But sure, such considerations are also worth it. And then, yes, because we’re no longer within the EU, it can happen that the country to which I’m sending my goods imposes customs duties on the product. And customs duties are different from import VAT. Import VAT is generally due when my package value is over $25 or over $50, there are very minimal threshold values like that. But customs duties are something I would normally also have to pay in addition to import VAT on a certain type of product. And that really depends on the destination country and the product. And you can also google a lot of this on the internet. There are, which I also think is a nice thing, international so-called "commodity codes" or "HS codes." And under these 8 to 11 or twelve-digit codes, you can basically find every product you can somehow buy anywhere. And based on this product coding you can then determine whether you have to pay customs in Australia or the UK.
Isabell: So are those the barcodes I find on many products, or where do I find this number?
Jenny: You have to search a bit for that, and then... for example, you can check with the... now I’m using Denglish again, "postal services," what do you call that in German? At the...
Isabell: At the post office?
Jenny: At the post office, for example, see whether they have information on that, and there’s a lot centrally on the internet about product codes. And you can actually start by searching for a product description. So what is the HS code for platform high heels, if we’re back on shoes, for example? And you can break that down so far that you find your shoe type, your shoe shape. And then you can see whether I have to pay customs duty on that? So as I said, customs duties exist on things the country doesn’t necessarily want to import. So often agricultural products, I don’t know if that’s a topic here, or certain electronic things. But for the average consumer, customs duty may not be such a hugely important question. And as I said, the marketplace can help with that too.
Isabell: You just said that certain products have higher customs duties in some countries because those countries, in quotation marks, don’t particularly want to import those products. Do you have a few examples of that?
Jenny: Yes, a very, very big topic is agricultural products. Many countries simply protect their domestic market, their domestic manufacturers. So things I can sow or things that can be consumed. Things one can drink, if it’s about consumption. Also alcoholic goods. There are very often additional charges due there too, such as alcohol levies, alcohol customs duties. There are also punitive tariffs that, depending on the country, then affect certain product categories price-wise. And it’s also interesting to consider that import VAT is the tax rate calculated on everything that comes with the requirements, including taxes, on my product in that country. So I have import duties, which are calculated based on what customs duties and what insurance requirements I’m bringing in on my product. There are also punitive tariffs or higher requirements, in some cases on battery products and everything around our medicine cabinet. The range can be very wide and depending on how protectionist, I think that’s a word, the country handles such things... so with such things definitely "double-click," inform yourself well again about what the possible requirements are. And also check with the marketplace where it says this is a category that just isn’t allowed here at all.
Isabell: Exactly, we have that too. Super exciting! I actually wasn’t that aware of the difference either....
Jenny: Then I’m glad if I could help.
Isabell: Learned something again too, I guess. Looking at the time briefly, dear Jenny, I think we could keep talking for a very long time. But we’re slowly at the end, and I think we were able to remove the first hurdles well, or at least explain what to pay attention to, what things should be clarified with the tax advisor, what questions I should bring. I think we were able to give a very, very good insight. Thank you very much for that! Do you have one final tip you’d like to give our merchants?
Jenny: Yes, I’d end with what I started with: think about the five Ws. What am I selling? Where to? How and to whom? That’s super helpful for a first discussion on the topic. Take a look at the help pages on your eBay marketplace. What information do you have there on the topic? I think, Isabell, you also have a great whitepaper on international selling, which could perhaps also be linked in the show notes if that fits today’s topic? I read it, I think it’s great! Check that out too. And I would really say: try it and then see how it goes.
Isabell: Jenny, before I let you go: I imagine your day-to-day life is quite stressful, and I think our merchants can relate very well to that too and also have stressful high and low phases now and then. How do you deal with stress? What’s your stress relief in everyday life? How do you find a little peace in between?
Jenny: That’s a great question. I have a 7-year-old daughter and she really de-stresses me because she’s right in the middle of life and simply lives in the moment and... I mean, I love spending time with her and I enjoy switching platforms, from being at work and consulting to then playing with my daughter, and I totally get immersed in dressing up her Barbies with her or watching her on the playground as she climbs. So yes, time with family is a huge way for me to slow down. And yes, I love doing that incredibly much and look forward to it every day.
Isabell: Very nice. We hope you’re now inspired to take the next steps toward international markets. A big thank you again to you, Jenny, for the exciting insights and tips. And if you want to go deeper now: Jenny already mentioned it. In the show notes you’ll find more info and links. We’ll also include the whitepaper there, and of course the info around the OSS procedure as well. And as always: if you liked the episode, subscribe to "Alles top. Gerne wieder!" so you don’t miss any episode. See you next time!
Jenny: You basically just have to look at how much do I sell to whom? And that brings us to my five Ws, which I have in my head. That’s my red thread when I talk about international selling or when I’d go to a tax advisor with questions, I’d always ask myself: what am I selling to whom, where to, and how much of it? Because while within the EU we are regulated relatively uniformly in terms of VAT, there are still certain key points according to which certain things are declared, sales of goods are reported, and also certain "thresholds" up to which I don’t have to do certain things or from which I have to do certain things.
Isabell: Hello and welcome to "Alles top. Gerne wieder!", the eBay podcast all about trade and e-commerce. I’m Isabell Butterwegge, and today it’s all about international selling and the maybe not quite so sexy-sounding topic of taxes. But don’t worry, I also have an expert with me who will guide you clearly and concisely through the actually not that complicated world of tax requirements: Jenny Dittmann from Nitt und Huff in Berlin was herself part of a marketplace tax team for a long time and also worked on various marketplaces such as Amazon, PayPal, and eBay, and has been supporting merchants as an entrepreneur and consultant for almost three years on process-related questions. And more recently increasingly on electronic invoices and tax technology. Her specialty: everything around indirect taxes and the question of how you can successfully overcome hurdles when selling abroad. With over 20 years of experience, she brings a wealth of practical knowledge to today’s episode. So first, a warm welcome, Jenny! Great to have you with us.
Jenny: Thanks for having me here, Isabell. Good morning.
Isabell: Jenny, before we dive straight into the topic, I’d like to know from you, when you come into the office in the morning and open your laptop, what are the first programs you open?
Jenny: Yeah, I’m extremely boring. Slack, Outlook, and LinkedIn pop up right away for me. And those are the three programs I open in the morning and consume immediately. There’s really nothing more exciting to tell.
Isabell: But I’d guess Outlook is probably one of them for most people. If we’re talking about international selling now, there are many who are thinking about getting started with it. And of course it’s kind of a no-brainer. If I can reach more customers, I also have a better chance of making more sales. What, in your opinion, is the first thought I should have if I’m considering selling internationally?
Jenny: I would definitely say, like Nike, "Just do it." If you pay attention to a few things, stick to a few things, and inform yourself well, it’s a really great thing. We’re lucky to be in the EU. In the EU there are no internal borders anymore. So all member states have, so to speak, opened their national borders for the free movement of people, services, and goods. That means, for example, that we can sell duty-free within the EU, that we don’t have to do certain things within the EU and don’t have to take certain routes that sellers from outside the EU selling to us or that we as sellers to non-EU countries have to consider. So the first thing is to be happy that we are in the EU single market and can trade here duty-free across national borders with other EU member states. The next thing I’d say is that I first need to look at what I’m selling. Is it things I can touch? In our jargon, that’s called "goods." So everything you can touch, physical things. And then of course there is the huge services sector, which knows even fewer borders. Especially thanks to the wonderful internet, the possibility of downloads, streaming, etc. So first I look at what am I selling? And then I’d say I think about what makes sense for me? Which country makes sense? In which country do I perhaps speak the same language? That naturally brings the DACH region to mind right away. Quick tip: Switzerland is not in the EU, so you always have to keep that in mind. But Austria, for example, is a classic. Then of course there are neighboring countries right on our border where many people speak at least the local language plus German. I’m thinking of the Benelux countries and also France. So in Germany we’re also lucky to be surrounded by many interesting neighboring countries to which we could all sell. So first of all, the question is what am I selling, and where can I relatively easily sell my goods in terms of language?
Isabell: That makes perfect sense! And I’d say for today’s episode we’ll focus on the case that we’re assuming someone is selling goods. I think that applies to most of our listeners at least. Even though services can apparently be a bit easier too. You’ve been dealing with international trade for a long time. What, from your experience, are the typical reasons why merchants are still hesitant to get into international trade?
Jenny: Yes, that’s the classic. I was lucky enough to be able to speak about this topic at eBay Seller roadshows back in 2013. And it’s a red thread that has continued ever since. And that really is the fear of taxes, of the administrative, i.e. bureaucratic, hurdles. And I’d love to help lower those a bit, to give a few supports, tools, and resources. I think if you know what you need and what you should know and what information you have, and then go to a really good tax advisor with that, then the actual selling should really be easy. And especially on marketplaces like eBay, where there is incredibly much support for sellers, lots of information on your help pages about a wide variety of international topics or CBT as it’s also called, Cross Border Trade topics, I can really only say: it’s not bad at all and it doesn’t hurt, and you open up a great market for yourself. And the supply chains should actually be easy too.
Isabell: Exactly, how the whole thing works at eBay, I’d say we’ll park that for a moment and come back to it later. You just said that, of course, within the EU there are no borders. That means getting started is easier there. And for some years now there’s also the so-called OSS procedure, the One-Stop Shop procedure. We already had a podcast episode about that, and we can add it to the show notes again. But maybe you can briefly outline what that actually means, because I think it’s an essential part we should look at again.
Jenny: Exactly, that’s a super, super good point. The EU legislator wants to make it much easier for merchants within the EU to handle these VAT issues. And so they thought, aha, it makes total sense if I could declare my sales to private individuals, which I make from my country to another EU country, through my own central declaration. That means I no longer have to go into every country I sell to, get a VAT ID there that starts with FR for France or PL for Poland or AT for Austria, but instead I can declare my private sales through this One-Stop-Shop or OSS declaration here in Germany. And that’s a great thing. You just have to, I’m putting this in quotation marks here, of course look at how much do I sell to whom? And that’s where we’re at my five Ws, which I always have in my head. That’s my red thread when I talk about international selling or when I’d go to a tax advisor with questions, I’d always ask myself: what are my five Ws? What am I selling, to whom, where to, and how much of it? Because while within the EU we are regulated relatively uniformly in terms of VAT, there are still certain key points according to which certain things are declared, sales of goods are reported, and also certain "thresholds" up to which I don’t have to do certain things or from which I have to do certain things.
Isabell: Do you have an example of that?
Jenny: So if I sell shoes, for example, then the first question is already answered: I sell shoes. And then I also know, when I go to the tax advisor, aha, this is not a service, but goods. Then I think about to whom. VAT is actually really simple, that’s why I can do it too. You only ever distinguish between private customers and business customers. In technical terms, that’s either selling to a consumer or a "C" or to a business, a "B". Then where to? So what’s the destination country? The how-question points clearly to the supply chain. So where do the shoes come from? Do I have them in a warehouse at my location here in Berlin, for example? Or do I have an external location, maybe even in another EU member state, because I want to keep my delivery routes short. So where do they come from, where are they going, and to whom? And then the question, how much? Am I selling under €150 per package, am I selling over €10,000 per year? So you have to look a bit at how much revenue am I making? Exactly, and then I basically already have everything I need to talk to my tax advisor, if I need someone to set this up properly for me, about the right approach from an administrative perspective.
Isabell: And what exactly does my tax advisor do when you say they set it up properly? What exactly does that mean?
Jenny: Yes, great question!
Isabell: Or is there some kind of quality criterion I can apply myself?
Jenny: So I would ask my tax advisor: what do I need to do? Is it enough if I register for OSS and then simply add, in my VAT advance returns, which I have to fill out anyway for my sales within Germany, what I sold to private customers in other EU countries? Then they say, yes exactly, but what about your business customers? It may also be that I have shoe stores that want to buy my shoes. And then I’d say, aha, how does that work then? And then, for example, they’d tell me, oh, with a business customer, you don’t have to charge them VAT; if your goods come here from Berlin, you issue them an invoice without VAT and they declare the tax themselves under the so-called "reverse-charge procedure." So my tax advisor should be able to tell me exactly, based on my situation, what VAT obligations do I have to meet? As I said, from the declaration to invoicing, be able to cover everything.
Isabell: And can I assume that if, let’s say, I haven’t sold internationally yet, I probably have a local tax advisor, should I assume that they also basically know about my international taxes or is that not the norm?
Jenny: I think in practice that’s not the norm. There are certainly differences. I would definitely knock on that door first. And there are also many who specialize in it and may have one or two practical tips. But I think, Isabell, you at eBay also already have really great tools in your toolbox where you can at least read a bit about what you should be thinking about. For example, the listing options: if you want to sell in other EU countries, marketplaces let you say, aha, I’d like to make my listing available in certain countries, etc. So yes...
Isabell: Maybe we can now briefly talk about how, at eBay, you can make listings, as you just said, available internationally. We have this passive and active option to basically go to the marketplaces or the other country sites. Can you briefly summarize those again?
Jenny: Yes, I hope I get it right. Feel free to correct me. Exactly, passive means you list on the ".de" site and then customers from other EU countries can see your listings. And then you can basically say, yes, I also ship to Austria or yes, I also ship to Poland. Through your listing you create visibility in other countries, and of course it makes sense to see whether they can understand my language when they see this listing there. And then you can also restrict that. I think that’s the first point.
Isabell: Exactly, that’s the first point. And in some cases, the listings are even translated too, at least the titles, exactly.
Jenny: Thanks AI! Exactly, and active listing is actually that you say, hey, I’d also like to proactively list my goods on international eBay sites and then not on the ".de" site, but maybe on the ".com" site, or wherever I feel like selling. So eBay gives you the option to precisely control and steer how you make your listings visible and in what way.
Isabell: Exactly, and that mainly has the advantage that I can also control prices better, besides the full translation of course. What about the different tax rates within the EU? Do I need to pay attention to anything if I sell internationally within the EU, or is it basically almost irrelevant thanks to the OSS procedure? Can I just keep going with my 19% basically?
Jenny: Wouldn’t that be nice, since in Germany we naturally also have a nice low tax rate. So, you’re bringing up a very important point. If I sell my goods to a private customer in another EU country, then the tax rate of the destination country applies. So you really do have to check: do I know at what tax rate my specific product is sold in the other EU country? There are special cases, for example books sometimes have lower tax rates than the standard rate. But it’s assumed that most normal goods you sell are subject to the so-called standard rate, and that varies across the EU. In Luxembourg, for example, the lowest tax rate is 17%. In Germany, with 19%, we’re also really in the lower range. If I sell to Hungary, I have 27% on a standard laptop, for example, or a pair of shoes, if we stick with the topic, or in the Nordic countries, Denmark, Sweden, we’re also at 25%. So it’s very important to factor in the correct tax rate. Because the price my end customer sees on the listing is the price they also pay. And if I don’t account for the fact that I have to remit 27% tax in that price, then mathematically it’s clear my margin goes down. So I should look at where I’m selling, what the tax rate is, and accordingly know, aha, it’s probably more than 19%, exactly.
Isabell: And ideally I get that information, how high it is, from my tax advisor too?
Jenny: Ideally from the tax advisor. But you can also really ask the internet, and the EU websites or your trusted tax advisor.
Isabell: Okay, how do I find the right destination country for me?
Jenny: Yes, so for me it’s again about looking at language: can I imagine that customers there will like and want my product? So does what I’m selling even fit there? Exactly, and then things like tax rates would probably be secondary, because I can simply plan to build them into my prices. And for me that’s a pass-through, neutral item. And then, how do I get my goods there? So if I assume that I only have one location for now and it’s probably here in Germany, then I also need to think about my delivery routes. And that’s where our service providers come in, sending the packages for me. And then I just need to know what I’m putting in, how much it’s worth, in order to choose the right package size, etc. accordingly and ensure it arrives properly in the destination country.
Isabell: Yes exactly, I think language is the one big thing that should be considered. We now also have an internal tool called "eBaymag." There I can actively choose the international sites too, and as you just described, I can basically just add the shipping and the tool then translates everything fully. And there I can also adjust the prices again, which... yes, may not be the decisive factor that VAT is different in one country, but as you just said, the margin still has to work and I of course still have to be competitive in the target market. Exactly, I can also achieve that via "eBaymag" by adjusting my price there and the VAT, which is very practical.
Jenny: Super practical and makes sense. Otherwise, otherwise it hurts, so...
Isabell: What would you advise merchants, based on your experience, who are too afraid of all the bureaucracy? As you’ve described it now, I’ve discussed my current status once with my tax advisor. I’ve chosen a destination country, probably initially within the EU because of the borders, dealt with tax rates, adjusted my prices, clarified translation. What other hurdles should I keep in mind?
Jenny: Yes, I’d really say: use technology to simply see how it goes. Find a site or find shipping routes that you can control well at first, where you can try a bit to see whether someone maybe orders your goods to Austria or to neighboring countries. And maybe try it first with one or two passive listings, where you can specifically say that’s where I would ship to. And then you can always expand that over time. And I’d really say keep an eye on it. It’s not something you should do on the side if it’s meant to grow. So it’s certainly good, and I wish everyone great international sales success, that they eventually have someone who really manages it proactively and then from shipping to the values that end up on your OSS declaration, because that really is the easiest way to declare these international sales within the EU, that everything fits and is internally consistent, that it’s all correctly recorded in accounting. So my thing is observe, try it out, and yes, then it works...
Isabell: Ideally! If merchants have now decided to sell internationally within the EU and also take part in the OSS procedure. What final tip would you give them for getting started?
Jenny: So first: congratulations! I think it’s great when that step is taken! And then simply do it and of course keep good records of everything. That’s just what the tax authorities want. Also, and I’d really point this out, the marketplace itself—your listeners have probably heard this many times—is obligated to simply collect and report data. And I would recommend to all merchants, at home in their accounting, to look closely at what I’m selling, where to, for what revenue? When did that happen? So fulfill my record-keeping obligations. But you do that anyway when you keep accounts. And then I’d say: yes, try it, monitor it, meaning observe and report, and everything else will fall into place.
Isabell: That sounds very, very good. You just said the marketplace is obliged to certain things. And that applies not only to reporting obligations. For example, when I sell to the UK, we are also obliged to collect and remit VAT. I think it’s the same for some other countries outside the EU too. And that is of course also an exciting case if I want to sell beyond the EU borders, which of course also comes with a lot of potential. Maybe you can briefly describe the cases again. What does it look like if I want to sell to the UK or Australia, for example?
Jenny: Yes, that’s a great question. There are also facilitations there, because the marketplace, the platform on which I sell, is also held responsible in many countries that are not in the EU. And I think that’s a huge relief for sellers. So the marketplace in Australia, the marketplace in the UK, says: listen, I’ll take over the declaration of import VAT for you. I handle this import on your behalf and then I basically sell in the destination country into which the goods are imported for you under the so-called "collect and remit procedure," I’m using the Denglisch term. That’s the common term. And that’s really something that already exists in many, many other countries today. So I already mentioned Australia, for example, a country that is also very suitable for international trade because of the language. And there, marketplaces are already taking over a lot of the responsibilities that merchants used to have. I mean, to conclude that point, I can of course also say I want my customer in that country to pay import VAT upon package handover at the door. I don’t know how good the buying experience is then, so to speak. Personally, I didn’t like that at first when it came that way. I thought it was better when everything was already settled. But the marketplace can also show you a lot through the help pages about what works how.
Isabell: So if I now decide to sell to Australia, I don’t have to register for VAT locally, I can basically just start selling, but of course I should look into import duties again?
Jenny: Exactly, I’d first bring these five Ws back to my tax advisor, because especially with goods it’s important where they come from. So if I don’t have a location in Australia and I sell through a marketplace, it could very well be that the marketplace takes care of many things for me in that case. So I would definitely check my circumstances first. Of course, it’s a long shipping route, and if at some point someone has opened such a great market for themselves in Australia and has goods there locally, that’s of course a different story. But in general, if I send my packages to Australia through a marketplace, it should already be much easier today than it was, I don’t know, ten years ago, when I first spoke with you about this topic.
Isabell: That’s nice when there’s such a positive development.
Jenny: I think so too.
Isabell: So my tax advisor can then also help me with all my customs questions, possibly... or should be able to?
Jenny: Exactly, should be able to. So this is a topic where, especially in the countries where the goods are going, you have to look at what I’m selling there. If it’s electronic products, what are the return rules, etc. There are of course other requirements that also need to be looked at. Packaging questions, I don’t know, power outlet questions. Not all of our European plugs fit, etc. That probably goes beyond my knowledge. But sure, such considerations are also worth it. And then, yes, because we’re no longer within the EU, it can happen that the country to which I’m sending my goods imposes customs duties on the product. And customs duties are different from import VAT. Import VAT is generally due when my package value is over $25 or over $50, there are very minimal threshold values like that. But customs duties are something I would normally also have to pay in addition to import VAT on a certain type of product. And that really depends on the destination country and the product. And you can also google a lot of this on the internet. There are, which I also think is a nice thing, international so-called "commodity codes" or "HS codes." And under these 8 to 11 or twelve-digit codes, you can basically find every product you can somehow buy anywhere. And based on this product coding you can then determine whether you have to pay customs in Australia or the UK.
Isabell: So are those the barcodes I find on many products, or where do I find this number?
Jenny: You have to search a bit for that, and then... for example, you can check with the... now I’m using Denglish again, "postal services," what do you call that in German? At the...
Isabell: At the post office?
Jenny: At the post office, for example, see whether they have information on that, and there’s a lot centrally on the internet about product codes. And you can actually start by searching for a product description. So what is the HS code for platform high heels, if we’re back on shoes, for example? And you can break that down so far that you find your shoe type, your shoe shape. And then you can see whether I have to pay customs duty on that? So as I said, customs duties exist on things the country doesn’t necessarily want to import. So often agricultural products, I don’t know if that’s a topic here, or certain electronic things. But for the average consumer, customs duty may not be such a hugely important question. And as I said, the marketplace can help with that too.
Isabell: You just said that certain products have higher customs duties in some countries because those countries, in quotation marks, don’t particularly want to import those products. Do you have a few examples of that?
Jenny: Yes, a very, very big topic is agricultural products. Many countries simply protect their domestic market, their domestic manufacturers. So things I can sow or things that can be consumed. Things one can drink, if it’s about consumption. Also alcoholic goods. There are very often additional charges due there too, such as alcohol levies, alcohol customs duties. There are also punitive tariffs that, depending on the country, then affect certain product categories price-wise. And it’s also interesting to consider that import VAT is the tax rate calculated on everything that comes with the requirements, including taxes, on my product in that country. So I have import duties, which are calculated based on what customs duties and what insurance requirements I’m bringing in on my product. There are also punitive tariffs or higher requirements, in some cases on battery products and everything around our medicine cabinet. The range can be very wide and depending on how protectionist, I think that’s a word, the country handles such things... so with such things definitely "double-click," inform yourself well again about what the possible requirements are. And also check with the marketplace where it says this is a category that just isn’t allowed here at all.
Isabell: Exactly, we have that too. Super exciting! I actually wasn’t that aware of the difference either....
Jenny: Then I’m glad if I could help.
Isabell: Learned something again too, I guess. Looking at the time briefly, dear Jenny, I think we could keep talking for a very long time. But we’re slowly at the end, and I think we were able to remove the first hurdles well, or at least explain what to pay attention to, what things should be clarified with the tax advisor, what questions I should bring. I think we were able to give a very, very good insight. Thank you very much for that! Do you have one final tip you’d like to give our merchants?
Jenny: Yes, I’d end with what I started with: think about the five Ws. What am I selling? Where to? How and to whom? That’s super helpful for a first discussion on the topic. Take a look at the help pages on your eBay marketplace. What information do you have there on the topic? I think, Isabell, you also have a great whitepaper on international selling, which could perhaps also be linked in the show notes if that fits today’s topic? I read it, I think it’s great! Check that out too. And I would really say: try it and then see how it goes.
Isabell: Jenny, before I let you go: I imagine your day-to-day life is quite stressful, and I think our merchants can relate very well to that too and also have stressful high and low phases now and then. How do you deal with stress? What’s your stress relief in everyday life? How do you find a little peace in between?
Jenny: That’s a great question. I have a 7-year-old daughter and she really de-stresses me because she’s right in the middle of life and simply lives in the moment and... I mean, I love spending time with her and I enjoy switching platforms, from being at work and consulting to then playing with my daughter, and I totally get immersed in dressing up her Barbies with her or watching her on the playground as she climbs. So yes, time with family is a huge way for me to slow down. And yes, I love doing that incredibly much and look forward to it every day.
Isabell: Very nice. We hope you’re now inspired to take the next steps toward international markets. A big thank you again to you, Jenny, for the exciting insights and tips. And if you want to go deeper now: Jenny already mentioned it. In the show notes you’ll find more info and links. We’ll also include the whitepaper there, and of course the info around the OSS procedure as well. And as always: if you liked the episode, subscribe to "Alles top. Gerne wieder!" so you don’t miss any episode. See you next time!
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nachlass-schaetze
·8 months agoIf I want to sell within the EU, I must provide operating instructions and notes for each individual item in all EU languages; if you deal in individual used goods, then international selling is off the table, the effort would simply be disproportionate.