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How do tax implications affect international wholesaling?

Tax implications can significantly affect international wholesaling. Here are some ways tax implications can affect international wholesaling:

Sales Tax

  • Sales taxes are typically assessed on the final consumer purchase, with wholesale transactions usually exempted[1].
  • For international sales, some US states provide exemptions for sales tax, although some destination countries will charge value-added tax for items when they enter as imports, which will require completing customs forms for shipments to foreign destinations[2].
  • Different countries have different tax rates, which can affect the final cost of the product and the competitiveness of the wholesaler[2].

Import/Export Taxes

  • International wholesalers may be subject to import/export taxes, which can vary depending on the country and the product being sold[2].
  • Customs fees may also be payable, as may national sales and local taxes[2].
  • The taxes and other tariffs are payable by the buyer of the goods, which can considerably add to the cost of the purchase[2].

Income Tax

  • International wholesalers may be subject to income tax in the countries where they do business[6].
  • Wholesalers should consult with a qualified advisor before making any business or tax-related decisions to more fully understand the impact of those decisions on the specific facts of the investment[1].

In summary, tax implications can affect international wholesaling in several ways, including sales tax, import/export taxes, and income tax. Wholesalers should be aware of the tax implications of doing business in different countries and consult with a qualified advisor to ensure compliance with local regulations.


[1] https://www.trade.gov/sites/default/files/2022-07/Taxes2022.pdf

[2] https://www.radial.com/insights/international-sales-what-are-tax-implications

[3] https://www.econstor.eu/bitstream/10419/157660/1/The%20Role%20of%20Wholesalers%20in%20International%20Distribution.pdf

[4] https://quaderno.io/blog/how-does-sales-tax-work-with-dropshipping/

[5] https://www.sganapati.com/files/Ganapati_Wholesalers_2020.pdf

[6] https://www.biggerpockets.com/forums/93/topics/17686-wholesale-tax-implications


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