Do I need to charge Tax to my Clients Customers?


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Possible Duplicate: Online Sales Tax: location based on transaction server, shipping address, CC, or location of purchaser?

My company is UK based but many of my clients are based in the US, Canada and other parts of the globe. I intend to setup a system for my clients so that they can take payments from their customers who are based all over the world.

So, it will be my UK based system, on US servers, taking payments through a website from global customers, all paying directly into clients bank accounts.

Will I have to charge tax at the standard rate per client country or can I charge UK rates of tax as it is my company running the system?

Tax International VAT

asked Apr 13 '12 at 02:20
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Jon Winstanley
101 points
  • There are tons of such questions here already. See the sidebar & search around. – Dnbrv 12 years ago
  • Sorry - I did search the site and check for dupes but I couldn't find anything with my exact circumstances. – Jon Winstanley 12 years ago

1 Answer


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If I read the question correctly, it is your client who is making the sale and receiving the funds directly into their bank accounts. You are essentially a wholesaler and providing fulfillment services.

The issue is that your customer (call it XYZ Store) will be responsible for collecting and remitting the sales tax in the USA, not you. Now to attract a new store like XYZ store to become a customer of yours, they will have a real problem as customer of yours if the website does not help them collect the taxes that they are required to collect.

So the net answer is that provisions for computing and collecting the appropriate taxes may be essential to being able to sign merchants up as your customers. You should simply deposit the amounts to the merchant's bank accounts as it is their obligation and responsibility to forward the amounts collected to the appropriate authorities. This is on the premise that they, not you, are making the sale to the end user.

answered Apr 13 '12 at 07:02
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Jonny Boats
4,848 points

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Tax International VAT