Drop shipping - accounting, taxes?

Drop shipping - accounting, taxes?

 

 

Question:

Hello,

I want to start my own online business that operates by the method - dropshipping - the process of buying goods from an online store (vendor) and selling it to my one (seller) at a premium. The process of packing and delivery to the end customer is carried out by the shop - the supplier from which the goods were originally purchased. I have a registered EOOD company in my name that was created because of another project but has not been active in the last few months.
Can I use it in this case and how is the accounting and tax payment in this type of trading?
I will be glad to receive a reply and I look forward to working together.
Greetings!

 

 

Answer:

Hello,

In principle, a company can be used for any type of activity. If the activity you want to engage in is not listed in the subject of activity under the founding act of the company, you have two options to use the existing company:

- if the activity in the constituent act has "open" content (by inserting a text such as ... "and any other activity that is not contrary to the law" ...) then there is no obstacle to engage in this activity without you need to take any action on the entry of a new activity.

- if the activity in the memorandum of association is precisely defined and has "closed" content - a new company agreement is inserted with the insertion of the activity you want to carry out, by entering this change of circumstances in the Commercial Register.

Keeping an account depends on the type of contract you enter into with the vendor sites.

In general, it is required to complete certain diaries (for orders placed, shipped goods, returned goods, received goods) for the movement of goods and reports on the movement of money concerning the goods from the payment system that you will use.

Costs such as advertising, domains, ancillary services, commissions, etc. are accounted for separately.

The business forms an accounting profit (or loss), which at the end of the year after transformation for tax purposes forms a taxable with 10% tax profit. The financial result obtained after paying the tax may be distributed as a dividend for personal use by the owner, but after paying an additional 5% dividend tax.

We hope we have been helpful.

If you need more details you can contact our convenient office in Burgas, Ruse, Varna, Sofia and Plovdiv.

Greetings!