In trying to comply with tax laws for your e-business, you may find yourself falling down the rabbit-hole, going through the looking glass, and attending a Mad Tea-Party.

Common sense, logic, and fairness never did apply fully to the field of taxation but this is especially true of e-commerce transactions.

1. Canada Customs Welcomes You to Canada!

Since I`m located in Canada, let`s start here.

Canada has what you might call a national sales tax or a value added tax (VAT). This Goods and Services Tax (G.S.T.) of seven percent is applicable to many Canadian transactions.

Not only is it critical to determine whether a taxable sale was made in Canada or not, but also where in Canada. If it was made (or deemed to be made) in any of the Harmonized Sales Tax (H.S.T.) provinces (Nova Scotia, New Brunswick, and Newfoundland and Labrador), a higher, fifteen percent H.S.T. rate applies. This is because those provinces have allowed Canada to collect their provincial sales taxes for them.

As well, each province and territory has its own rules. Ontario charges eight percent retail sales tax on many typical Internet transactions whereas Alberta has no provincial sales tax.

Of course, this is only scatching the surface. This entire article is an over-simplification of a very complex subject. You will definitely need professional advice to help you through E-Commerce Taxland.

2. When Exports Aren`t Exports

In Canada, exports are “zero-rated” sales for G.S.T. purposes. This means that when you ship a product to someone outside Canada, you don`t charge G.S.T. Yet, you get to claim (or deduct from the G.S.T. collected by you) all the “input tax credits” (G.S.T. that you paid for business purposes) to make that export. The idea, I suppose, is to encourage exporting.

However, if you export products other than tangible, physical goods, beware! There are many pitfalls to watch out for.

As one example, consider digitized products that you might sell from your Canadian website, such as e-books, downloadable software, or subscriptions to content. You would be considered to be selling “intangible personal property”. Unless your product is also considered “intellectual property” (such as software or e-books that you produced or have obtained the rights for), you will have to charge G.S.T. The reason why, according to the Canada Customs and Revenue Agency, is that it COULD be used inside Canada, even if it isn`t.

Say you sold a membership for accessing digitized content (from various sources) on your Canadian website to a customer in the United States. Since there are no restrictions as to where the intangible personal property may be used, and the property is not considered intellectual property (nor the provision of a service), the American customer is subject to G.S.T., even if he never comes to Canada.

Strangely, the same logic doesn`t apply when an American buys a regular book (or a car) which he COULD bring into Canada with him and use here. It is true that it is easier for Canada to assess such items at the border than in cyberspace, but I know of no cases of Americans being taxed on the books or cars they bring with them when they come to live in Canada for about half the year.

As a Canadian registrant, one way you might legally avoid this silly March Hare is to explicitly state on your website and invoice that use of such intangible personal property in Canada is prohibited (or requires an additional fee and the payment of G.S.T.).

3. When Imports Aren`t Imports

Goods shipped to Canada are subject to G.S.T. on importation. Such tax is often assessed at the border. But what if you are a Canadian registered for G.S.T., selling to a Canadian customer but your supplier is in a foreign country?

Pretend that your Canadian customer has bought a book from you from your Canadian website. Your drop ship supplier is located in the United States and is registered for G.S.T. You fax your order to the American company, and they, in turn, ship the book for you (complete with Customs Declaration and their G.S.T. Business Number).

Since they paid the G.S.T., you wouldn`t think you would have to charge it again, would you? “Wrong!”, smiles the Cheshire cat. Since you are a registrant located in Canada, you are required to charge and remit the G.S.T.

But you are entitled to input tax credits, aren`t you? In many cases, the answer is “No”.

It may be very difficult for you to satisfy the documentary and other technical requirements. As an example, it is not uncommon for American suppliers to absolutely refuse to give an invoice breaking down the G.S.T. or to allow you to be the Importer of Record. This complicates their life unnecessarily and they just don`t need the aggravation.

There are relieving tax provisions covering drop shipping, sales agencies, and other situations. In many cases, unfortunately, the most practical solution is to allow the tax to be paid twice.

4. When You`re Subject to Tax Where You`re Not Subject to Tax

It makes sense that countries impose a tax on sales and income made in their own jurisdiction. But does it make sense for Germany to tax sales made in the United States?

In effect, starting July 1, 2003, the European Union has done just that by imposing an online sales tax.

This means that if someone from England buys an e-book from someone in the United States, the American should submit this tax. Of course, If the sale was to someone in Germany, the tax rate would be different.

The rationale behind this follows: Since countries can`t collect sales tax on Internet transactions at their borders, the only way they can collect it (other than a self-assessment system) is with an online sales tax. Further, it is claimed that businesses in the European Union suffer a major competitive disadvantage because they have to collect Value Added Tax (VAT) but others don`t.

I know what they mean. Welcome to the club!

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Starting a business is exciting and nerve-wracking. It will be one of the biggest investments you’ll make during your lifetime. Not just financially, but emotionally as well. Doing it right will mean taking on a lot of responsibilities and making a lot of sacrifices. It will also mean working harder than you ever have before.

For these reasons, business ownership is not for everyone. If you don’t have the right skills, personality, and commitment to operate a business, you’ll be in trouble before you make your first sale. So before you begin planning your E-Commerce business, you need to take a hard look at yourself, your family, and your finances, and give honest answers to some very important questions.

The following questions wiH help you weigh your personal characteristics and beliefs against the realities of business ownership. Don’t worry if you find that a few of the questions reveal doubts or weaknesses. Nobody’s a perfect match for any profession. But if you find many of the questions troubling, you may want to rethink your decision to go into business.

1) Are you willing to accept the responsibility of operating your own business ?

Forget the tidy little set of responsibilities that came with a position in corporate life. When you run a business, you’re in charge of everything?from opening the doors in the morning to cleaning up at night. Then when you go home, you worry.
The hours are long, there’s a high degree of stress, and there’s always too much to do and not enough time to do it. You’ll have to deal with your customers and your employees. You’ll be responsible for the finances of the business and dealing with taxes. And you’ll need to fill out a lot of forms and sign a lot of checks.

Make sure you understand what you’re getting into. As a business owner, you’ll have more responsibilities than you’ve ever had before, no matter what your previous jobs have been. If you understand this simple fact, you’ll be ready to take your responsibilities on.

2) Are you comfortable making hard decisions ?

As the owner of a business, you’ll also have to make many decisions that affect the business, your livelihood, and that of your employees. Many times thev/11 be tough to make, including the decision to lay people off if your business falls on hard times. It will require decisiveness, mental toughness, and resolve. If you have trouble when faced with tough choices, this could be a problem area.

Do you think owning your own business is the way to easy money ?

Think again. Many people actually end up sacrificing income to open their businesses, at least at first. That’s the price they’re willing to pay for independence.
If you’re thinking of giving up a promising career and a lucrative income to start your business, be realistic about what your financial needs are and whether or not the business will meet those needs. Remember, you’re building a business.

It may take you a number of years to get to the income level you want or need. On the other hand, you may decide that you’re willing to sacrifice some money for the reward of being your own boss. Many people have found it to be worth every penny.

3) Are you starting a business out of desperation N?

This is a very real concern, particularly in light of the huge number of experienced businessmen and businesswomen who have been cast adrift in the job market through corporate downsizing in recent years. If you’re one of these people and are thinking about starting a business because you think it’s your only option, be very careful. Yes, it can be the answer to your future security, but only if you’re willing to make the necessary commitments and sacrifices. The world of business ownership is vastly different from the corporate world. Make sure you recognize the differences before you make the move.

4) Are you well organized ?

The day-to-day operation of your business is going to require you to assume many responsibilities. Let’s consider an average day. You may need to do the payroll, talk to suppliers, pay a few bills, work on a new advertising pamphlet, and prepare some tax forms. At the same time you’ll be filling orders and making sure they get sent out on time. Then there’s always the unexpected?your computer bombs or the air-conditioning conks out.

As a business owner, you’ll need to keep many balls in the air at one time. Your ability to juggle all these responsibilities will directly affect your success. If you’re well organized, you’ll have a list of the things you need to do, and you’ll methodically go through it during the course of the day. If you’re interrupted, you’ll pick up where you left off after you’ve dealt with the problem. If you’re still not through at the end of the day, you’ll sit there and work until you’ve finished. Procrastinators do not do well in business. If you get behind, you’re sunk.

5) Are you creative ?

It’s an asset to any business. No matter how great your product, you’re not going to be the only one selling it. Marketing and advertising are critical to getting customers’ attention and encouraging them to buy. If you have a creative streak?whether it be copywriting, graphic design, or even an offbeat sense of humor?it will be an invaluable asset to your business.

T his is doubly true in E-Commerce . Since your customers can’t see the items they’re purchasing “in the flesh,” so to speak, they need to be enticed by the visual presentation and written description in your promotional materials.

6) Are you flexible ?

In business, if an idea or plan doesn’t work, you can’t let yourself waste time, energy, and emotion bemoaning its failure. You need to quickly come up with an alternative solution. Flexibility and adaptability are the key. You’ll need to stay focused to achieve your goal, but you may need to try several different paths to get there.

In E-Commerce order, for example, one marketing approach may work for a while and then stall. At that point you’ll need to come up with something new. Remember, every business plan and every business

can benefit from a fresh look every once in a while, even when things seem to be going along just fine.

7) Are you goal orientated ?

This trait is obviously helpful in all parts of life, but it’s particularly helpful in business. As a business owner, your goals will be defined in very simple, concrete terms?gross sales and net profit.

A good businessperson approaches each year with new goals and uses them as motivating forces throughout the year. Let’s say gross sales for your first year of operation were $500,000 and your net profit was $ 100,000. For the following year, you might set as your goal a 20 percent increase, or $ 600,000and $ 120,000. Achieving or surpassing those figures will drive you day after day.
Goal-oriented people also plan for the future. Eventually, you may want to expand your product selection and your target market. You’ll have a long-term plan that includes the timing of your expansion and what every aspect of your business will do to accommodate increased volume.

Are you an optimist ?

Having the right mental attitude is important for every aspect of life. When you run into hard times, keeping an upbeat attitude and looking for the positive side of things is critical to riding out the storm.

This is particularly true in business. By nature, it’s a trip with peaks and valleys. For instance, the hardest time for any business is the first year or two. You may spend months getting things ready to go, carefully selecting the merchandise you’ll carry, and getting your advertising strategy together. Then you’ll send out your first e-mailing and wait anxiously for the phone to begin ringing off the hook and your emailbox to be jammed with orders.

But nothing happens. Maybe a few orders trickle in, or you get some phone calls with questions about certain items. This isn’t unusual, but even knowing that, you’ll still worry. If you’re the type of person who gets down when things don’t quite go the way you’d like, you might have trouble with the roller coaster ride that any business will take you on. Keeping a positive mental attitude is essential to weathering the bad times and working hard to make the good ones arrive that much sooner.

9 ) Have you any experience you can use in running the business ?

If you have, it will make learning the business a lot easier. Experience in sales, accounting, advertising, marketing, personnel management, taxes, or any other business-related responsibility is a definite plus for a potential business owner.
Experience with computers is mandatory since in E-Commerce of course computers are your lifeblood .

You have to have hands on experience with computers both hardware and software and not be intimidated by comouter experts and geeeks but rather be able to work with these otten eccentric individuals who command often unique skills.

10 ) Do you enjoy workling with people ?

One of the painful realities of being in retail is the fact that the customer is always right. Granted, running a E-Commerce business distances you from your customers in the sense that there’s rarely face-to-face contact. But that doesn’t mean you don’t owe them the same service and courtesy you would if they were standing right in front of you.

As an E-Commerce retailer, you’ll have the same problems with customers that storefront retailers experience. You’ll have complaints about your merchandise, your prices, your service, your policies, and your employees. Believe me, no matter how well you think you have things organized, someone will find fault with them.

This is where tact, patience, and understanding come in. When a customer is unhappy, you must put up with their behavior and try to amend the situation. The last thing your business needs is a bad reputation. If you allow a customer to go away unsatisfied, you can be sure the person will tell all their friends how terrible you are. That, in turn, will keep a lot of potential customers from becoming regular customers.

So there will be times when you’ll have to bite the bullet and make amends quickly and courteously when you’d really like to tell the customer to take a hike. Because you’re dealing with someone who may be halfway across the country, it may take a personal phone call, an overnight special delivery, or a refund with a handwritten note saying you’re sorry the purchase didn’t work out but you look forward to helping them in the future. Just make sure you leave the customer happy. .You’ll also have to deal with the people who work for you. As the owner of a business, your behavior will set the standard for your employees’ behavior. If you’re negative and critical, they’ll be negative and critical. But if you’re cheerful and upbeat, that will also be reflected in their behavior.

You’ll have to be tough at times. Managing people isn’t easy. If you’re lucky, most of your employees will be pleasant, will work hard, and will contribute positively to the business. But you’ll also have a few who will turn out to be unpleasant, lazy, incompetent, or even dishonest. Motivating them will be a challenge. If you can’t change their behavior, you have to be able to fire them.

11) Are you comfortable dealing with money ?

Some people are terribly inept at finances. Others can do it but hate it. Like it or not, financial management is an inescapable fact of business ownership. You’ll be dealing with complex monetary issues, from financing the business to handling the day-to-day receipts. You’ll be responsible for paying the bills, making the bank deposits, doing the payroll, and sending in withholding taxes and quarterly reports to the IRS and the state. You may be handling substantial amounts of cash, and there are certain risks inherent in that responsibility.

You’ll also be making business plans. These are detailed projections of your income and expenses for a given period of time, usually three months, six months, or a year. In some ways, they’re quite simple?you want to maximize your income and minimize your expenses. But they take careful planning and budgeting. What are the minimum staffing expenses going to be to operate the business? What will your overhead and utilities be? How much money can you spend on advertising? When are the taxes due? How will you determine the price of your products? What will you charge for shipping and handling?

Any financial experience you may have had will help you with this aspect of your business. And if you like this type of activity, it will be to your advantage. But if you find it burdensome, you’ll have to be ready to deal with it.

12 ) Are you financially prepared to open a business ?

Starting any business requires money. The nice thing about E-Commerce is that you can make it about as bare-bones as you care to, particularly if you’re starting a small operation that you’ll operate in your spare time. Many people have started E-Commerce businesses for just a relatively small amount of capital .

But the bigger your dreams, the more money you’re going to need. If you’re planning a full-time E-Commerce business with numerous products, the start-up costs will be considerably higher. Then a whole new batch of considerations comes into play. Do you have the financial reserves to support you and your family for a period of time until business picks up? Some business advisers say you should have enough on hand to survive for a year with no income whatsoever. While that may be an unrealistic goal, you do need to consider what happens if the business fails altogether. Do you have the resources to weather such a catastrophe?

Before you begin planning your business, you need to take a careful look at your finances. How much of your available capital are you willing to risk? Are you willing to personally sign for a business loan? What do you have to offer as collateral? How much cash will you have in reserve for emergencies? If you don’t have enough to start the business yourself, are you willing to take on a partner or partners? Are you staking your entire financial future on the business?

Undercapitalization is the main cause of failure for small businesses in the United States. Yet many people, caught up in the entrepreneurial fever, continue to start businesses on a shoestring, woefully unprepared to deal with the bad times. If you can’t start your business with a comfortable financial cushion beneath you, you may be taking a risk you can’t afford.

13 ) Is your family ready to amke the committment

Whether your family is actively involved in the business or not, business ownership is going to have a huge effect on them. If you’re the only one involved in its day-to-day operation, the rest of the family isn’t going to see you very much. If they’re used to having you around on evenings and weekends, this may cause problems.
Your spouse may be unhappy having less time to go out to dinner or the mov
ies. Your absence may also mean he or she is going to have to assume a lot more responsibility at home? chauffeuring the kids here and there, helping with homework, doing the shopping, cooking the meals, cleaning the house, paying the bills, and all the other odds and ends that are part of day-to-day life.

Your kids may have to make some big adjustments, too. You might not be available for Little League games, dance recitals, school plays, and all the other events of childhood.

There may also be some financial adjustments for your family. If you’re like most fledgling business owners, you’ll be running a tight ship for a few years. Your family will have to realize there might not be money for some of the luxuries they used to take for granted.

It’s extremely important to think about potential family problems early in the process. Sit everyone down together and tell them what you’re thinking of doing. Make sure they know what it will mean to the family’s day-to-day routine and find out how they feel about it. Their support will make your life a lot easier. You’re going to have enough stress just handling the business. The last thing you’ll need is a family crisis.

The other side of the coin is having your family members working in the business with you. The dynamics of family businesses can be quite volatile, and you’ll want to make sure everyone can get along. A major question will be, Who’s the boss? Are the lines of authority clearly drawn? Are you and your spouse going to be equals in ownership and operation of the business? If so, are you able to work together cheerfully and consider each other’s opinions? If you are, you’ll probably have no problem running the company together. But if you can’t even agree on what kind of soap to use, you may have trouble.

14 ) can you handle stress ?

It comes with the territory. Long hours, endless responsibility, dealing with customers, worrying about money?these can take a huge emotional toll. Some people thrive on stress. It actually makes them perform better. They stay calm in a crisis and can react quickly to change. Others fall apart when things get too hectic. Which kind of person are you?

15 ) Are you in good health ?

Running a business can be physically taxing as well. You may have to spend a lot of time on your feet and not get as much sleep as you’d like. You may not have as much time to eat properly or exercise regularly. There may be activities in the business that require a fair amount of physical strength.Take an inventory of your physical health. Do you have any chronic problems that might prevent you from operating the business efficiently? Remember, when you own the business, you have to be there day after day. A long absence because of a serious illness could spell disaster.

These questions may be heart wrenching and difficult to consider but are essential if you are to consider whether you are ready willing and able to run your own E-Commerce BUSINESS?

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Gaining success through the eBay selling business may not be as complicated as you think. You only have to know where to find free eBay secrets that count. Once you get hold of free eBay secrets, start applying them in order for you to put up a successful eBay selling business.

No need to look high and low for free eBay secrets, we?ve got them compiled here for you. You can use these free eBay secrets to create a booming business on eBay.

Once you decide to become an eBay seller, choose the user ID you will have to use, carefully. Choose a User ID that represents your business or the items you sell. Your User ID automatically becomes your eBay identity to potential buyers.

Look up the ?How to Sell? Tour and watch the eBay selling demonstration video. Then learn of free eBay secrets in starting up at the eBay Learning Center.

Get your ID verified by using the ID Verify option when setting up a Seller’s Account. This gives you an ID Verify icon in your feedback profile thereby giving the eBay community more confidence to buy from you. Don?t let this free eBay secret go unheeded.

Make sure to get computer backup disks in order for you to store up valuable data. A free eBay secret of using accounting software will help you know how your business is doing so you can make it more profitable.

Look for a good place where you can put your inventory and shipping materials. It?s a free eBay secret that they need to be in a safe, dry place nearby. Writing a daily To-Do List will help you organize your schedule. It is also the free eBay secret for you to manage your time on normal tasks and follow up on opportunities that aren’t part of them.

Taking eBay?s fees into account may be the free eBay secret you need that?ll guided the pricing of your items.

Find the best category where to list your products under. This free eBay secret is probably known by everyone. From eBay’s home page, click the Buy button, and browse the categories to find categories that apply to your items. Another free eBay secret that?s necessary for your products? success is checking where competing items have been placed. It’s a good idea to choose two categories for your listings to reach more buyers.

Even if you have to pay additional fee, spotlighting your title is a practically free eBay secret that?s guaranteed to grab buyers’ attention when they search for listings.

Hiring a Trading Assistant can free up the time you need to let you focus on the more important aspects of your eBay business. Constantly monitor My eBay for your listings performance and other activities on the site. Keep track of your eBay correspondence by using My Messages. Surely, this free eBay secret will be a great help.

Attending trade shows is not only a free eBay secret advice it is also a great opportunity where you can get product trends preview and connect with manufacturers and discuss the opportunity of selling their products on eBay. Make sure to bring your business cards and be ready for discussions/

Protect yourself from potential fraud. Be wary for unusual buyer requests and consider it as a fraudulent sign if such requests come to light.

eBay consultants are available for advice and even free eBay secret tip offs. Once you know how to sell on eBay and checked out the eBay Community, your head will be buzzing with new business ideas.

Subscribing Chatter may get you not only feature articles, tips, helpful links and member interviews but maybe also free eBay secrets to success. Signing up for the PowerUp Newsletter can get you advanced notice of upcoming events and promotions. You’ll get to know free listing days, feature discounts, seller sweepstakes and more.

There?s nothing wrong in promoting your eBay store. In fact it is another free eBay secret that you design marketing materials to promote your store.

Once you made a final sale price, donate part of it to a Nonprofit Organization of your choice. Remember that the ultimate free eBay secret to success is passing on the blessings and knowledge you acquire!

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