What do I need to know about taxes?
Sales Tax, VAT, Tariffs and Import Fees
Supplying products to drop shippers can have important tax implications. The good news is that by collecting tax exemption certificates or VAT numbers from your retailers, you can pass the burden of collecting and remitting sales tax and VAT to the retailer who made the sale to the end customer.
Every business is different. You should discuss how selling to drop shippers could impact your sales tax compliance with your accountant.
- Mothership does not charge or collect sales tax or VAT on any of the orders placed by your retailers.
- Mothership does not collect tax exemption certificates, resale certificates, VAT numbers, or equivalent documentation from your retailers.
- It is your responsibility to ensure that you have all of the necessary documentation from your retailers and that you comply with all applicable laws and regulations.
In order to use Mothership, you need to acknowledge that you understand that entering into a drop shipping arrangement can result in potential negative tax consequences. To do so, go to the taxes page by clicking on the "Learn More" button under Taxes on the Application Setup page. You'll be taken to the page below. After you check the box marked with a red arrow in the image below, click the 'Save' button.
Next, let's take a look at inviting retailers to connect to your Mothership account.