VAT number a must for opening an e-commerce business
Do you want to open an e-commerce and want to know more about VAT number, cost and requirements?
Appvizer in this article explains everything about VAT number for e-commerce.
Read to the bottom to find out more.
How to open a VAT number for e-commerce?
In Italy, the Web sales sector is regulated like all forms of sales by the Bersani Decree, and in Article 21, e-commerce sales are lumped together with all other forms of distance selling.
If you happen to sell online only on an occasional basis, you are not obliged to open a VAT number, but you will only have to make a receipt to the customer, if the amount of the receipt is more than 77.47 euros you will also have to put a 2 euro revenue stamp on it.The opening of the VAT number becomes mandatory at the moment in which carrying out this activity becomes habitual.
The VAT number is composed of 11 numbers in which the first 7 indicate the taxpayer and the other 3 identify the tax office.
In order to open a VAT number you will have to notify the revenue office of the start of your activity within 30 days using form AA9/7 if you are a sole proprietor or if you are self-employed or using form AA7/7 if you are a company.
These forms could be submitted by giving them in your own hands to the Internal Revenue Service office, or by sending a registered letter with return receipt.
Also according to your activity you will have to choose the ATECO code and choose the type of accounting regime between:the flat-rate regime and ordinary accounting.
After you send the signed declaration you will be given a VAT number that will remain the same until the end of your activity.
What are the requirements to open a VAT number?
First of all, you have to be of legal age and be a resident, these two elements are mandatory.In addition there are also mental requirements, to open a VAT number you must have all the mental faculties.All these requirements are necessary and the lack of only one is a blocking element to obtain this tool that identifies you as an online merchant.
Moral requirements are necessary for all individuals who intend to open a p. VAT:
- not having declared bankruptcy
- not having been convicted in the past of a sentence that is more than 3 years in prison;
- not having been previously convicted of any of the crimes set forth in Book II, Title VIII, Chapter II of the Penal Code, such as, for example, issuance of bad checks, insolvency or fraudulent bankruptcy, usury, kidnapping for extortion or robbery not having been convicted of two or more prison or fine sentences in the five years
- not being declared habitual offenders.
Tax regime for e-commerce
Regarding the choice of tax regime if your turnover is not very high, we recommend that you opt for a flat-rate regime, or a tax regime that is facilitated and suitable for those who have a turnover of less than 65,000 euros per year. This regime is designed to manage the VAT number in asimple way and reduce taxes.If you decide to subject yourself to this type of regime, know that you will only have to pay a single substitute tax with a fixed rate of 15% on taxable income.
In addition, for those who qualify i.e., start-ups, the rate can be reduced to 5 percent for the first 5 years.
This is not only the advantage of the flat-rate regime, but also the exemption from VAT exposure and all its requirements, you can also be exempt from sector studies, you will not have the obligation to register invoices and you will not have to compulsorily use electronic invoices.
However, this regime has some disadvantages such as the loss of the benefit of IRPEF tax deductions and there is no possibility of deducting what costs, since the tax has a flat rate cost taking into account the revenues obtained.
To be eligible for the flat-rate scheme, one must not exceed 65,000 euros annually, which is the maximum threshold
What are the social security contributions for e-commerce?
In addition to taxes, you will also have to pay social security contributions for this you have to be registered in the separate management INPS as a trader.You will have to pay 2 types of contributions:
Fixed contributions which cost about 3600 euros and must be paid in 4 installments and percentage contributions which are 24% of taxable income.
As for the percentage contributions you will have to pay only on the percentage of the part that exceeds 15000 euros.
Also, I remind you that flat-rate workers can ask for a 35% reduction on the fixed contributions.
Is it mandatory to have a VAT number to do e-commerce?
A VAT number is mandatory when the activity is habitual, if it is an occasional activity it is not mandatory to use a VAT number.
You may now be wondering what is the difference between an occasional and usual activity.According to the Internal Revenue Service, an activity can be considered usual and not occasional if it leads to a high turnover while being a single business.
In addition, an activity is considered occasional when its duration of time is not long and must have occurred in an unplanned and occasional manner.
If you decide to create an e-commerce site, know that in this case you will definitely have to have a VAT number since an activity for which you create an e-commerce site is definitely an activity that will have a long duration.Creating a website is also usually a planned thing since it requires a lot of thought about the structure and functionality needed.
If you decide to do marketing campaigns you have to open a VAT number since the activities for which a marketing campaign is done are designed to last.
How much does it cost to open a VAT number?
To open a VAT number there are costs, first of all you will have to register with the Chamber of Commerce at a cost of €35.50 which includes secretarial fees and stamp duty. As for partnerships and corporations there are additional costs including:cost for the incorporation of the company which is done by the notary and the registration tax on the certificate of incorporation.
One must also consider the cost of INPS contributions that must be paid to the Separate Artisans and Merchants Administration and the management of the VAT number.
Opening a VAT number is an essential element if you want to run your business smoothly without having problems.Not having a VAT number will definitely be a blocking element for the management of your business.To be in compliance think about all the tax obligations.
Article translated from Italian