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Your small business is expanding. And not just down the block -- you're eyeing overseas customers via online sales. Growing your customer base is always a good idea, but advertising, selling, and shipping to multiple international jurisdictions can carry its own legal complications.
Do these foreign countries have different advertising laws? How are you and your customers taxed? And how much is it going to cost to get your products to your new customers? Here are a few tips for selling to international customers online.
The Tax Man
For a brief moment, online sales were the tax version of the wild, wild, west. No one was quite sure who should be paying which state's sales tax. The state where the business is incorporated? Where the buyer lives? Where the product is shipped? But states and other countries are getting wiser about their Internet sales taxes.
While we're still waiting on a uniform federal tax law for intra-American online sales, it's likely that you'll need to pay tariffs and import taxes to the destination country where your products are headed. And you may need to verify that your customers are complying with their local sales tax laws. Getting in touch with a local tax attorney well briefed in international law or finding a tax attorney abroad might be your best bet.
Selling Overseas, Man
There are always perils to selling overseas, and those are only exacerbated when the Internet is involved. Do you know the advertising laws in foreign countries? While the United States has the FTC to regulate truth in advertising, there are several regulatory bodies keeping on eye on international advertising, including the European Advertising Standards Alliance coordinates advertising regulations for Europe.
Do you know the Harmonized Commodity Description and Coding System? It's the world Customs Organization's way of identifying products moving in international commerce, and you'll need to properly identify and code each and every product you plan on selling overseas. Do you know which customs forms required for international export? You'll probably need to obtain Certificates of Origin and fill out additional shipping forms. Chances are you will have to upgrade your systems and/or hire a new employee.
So before your website starts marketing, selling, and shipping your products to overseas customers, you may want to consult with an experienced commercial attorney near you.
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