How sales tax works when you buy bikes and gear online

The big online stores for bikes, parts and accessories who serve customers across the globe are concentrated in the European Union and America, but irrespective of location, if they sell overseas the sales tax is removed.

In the UK the rate is 20% and when shopping online, when you select a delivery destination outside of the United Kingdom, this will be removed from the final price. In the United States, sales tax rates differ from state to state and likewise are (should be) removed for overseas purchases.

 

However

If you are in the European Union and order from an online retailer in another EU member nation, provided that they will deliver to you, they will also add and collect the sales tax applicable in your country. This means there is no additional local taxation.

If you are in the United States and order from a different state, tax may or may not be collected by the retailer, depending on the laws. If sales tax is not charged, many states will require you, by law, to include details of online purchases where no tax was collected in your tax return.

For customers who are ‘overseas’ generally your government will apply taxes and/or duty on your imports.

 

Tax Exemptions

When the tax is calculated and collected automatically, it makes it easy. There are a number of factors which can affect tax, in brief this includes:

• Trade Agreements between countries – certain products may be exempt
• Type of Product – likewise, certain items may be excluded or have a reduced tax rate
• Usage – exemptions on items for certain activities
• Taxation Threshold – Some countries impose tax and duties on items over a specific value

And more… each country is different so it is worth researching. When importing it may be required to pay the complete taxes and apply for exemptions for a refund.

Leave a Reply

Your email address will not be published. Required fields are marked *