Hellotax Review And Tutorial – VAT Registration & Filing Solution For Online Sellers In Europe
hellotax Review And Tutorial for EU VAT Registration & Filing
Hi! Thank you for visiting my blog. My name is Vova Even, and I have been an active Amazon seller since 2016. I also share tutorials, hacks, and trade secrets on YouTube and Udemy. My goal is to help new and advanced Amazon FBA sellers save more money while growing consistently.
In this article, I talk about hellotax — what it is and how it streamlines EU VAT compliance. The article is based on one of my recent YouTube tutorials featuring Nick Penev from hellotax. Nick explained everything in a very descriptive and sequential manner. That inspired me to convert it into an article as well.
However, if you would like to watch the tutorial instead, it's embedded below.
Key Offers I Share in this Article:
Now, before we get into the specifics, I'd like to introduce you to Nick so you know who he is.
Nick is Partnership Manager at hellotax. Having been an eCommerce seller for 10 years, managing the private label and supplement businesses across Europe, he is well aware of how hard it is to expand, what common obstacles sellers encounter, and what is the best way to overcome them.
As a matter of fact, Nick used to be a client of hellotax. His journey to becoming a hellotax Partnership Manager began when he contacted tax advisors in multiple European markets. Unfortunately, one of those advisors made a mistake, and guess what? Nick had to pay the penalty! That made him seek a one-stop solution for all markets, and eventually, he discovered hellotax.
Initially, Nick was using hellotax to do VAT filings for his brands across Europe, but after selling his brands, he joined the company to oversee its partnerships.
While talking about himself, Nick also talked about hellotax — how it was built by two former Amazon sellers who were also having issues with VAT compliance. You can learn more about this incredibly fascinating story on hellotax About Us page.
What is VAT? Why is VAT Compliance Critical for Business Success in Europe?
Value-Added-Tax aka VAT is a consumption tax levied on the value added through each stage of a product or service production. VAT compliance is the act of ensuring that your VAT return is filed on time and in an accurate manner. However, in all candor, that's not an easy process.
To explain why it is so difficult and how to circumvent the chaos, Nick gave a presentation. I've gone through each slide in significant detail below, but you can watch the tutorial to see the original presentation.
Why Should You Register for VAT
When growing into the European market, you must comply with tax regulations, including VAT. Otherwise, it wouldn't be possible for you to continue selling on Amazon and other similar marketplaces.
Why Should You Sell in Europe
Europe is a large market with over 400 million active people across 27 countries. They may be your prospective customers. Who knows? Given that, if you sell in your local country, you must also grow in these countries. It will boost the prominence of your brand from local to global.
And before I go any further, if you're confused because no one else is taking that approach, then why you should? Listen! Don't wait for your competitors. Be the change! There's no rule that says you can't grow your company because your competitors aren't growing. You can! You definitely can! It'd help you stand out and take the largest market share.
What You Need to Know About VAT in Europe
The first thing you must know about EU VAT is your past and present VAT liability. In simple words, you must have a solid understanding of how much VAT tax you owe at any given time.
Second, you must register for VAT in at least one marketplace. You must also be aware of your moves — knowing which stock you're moving from one market to another is a prerequisite.
Third, you need to have full visibility of all your sales across different channels because VAT rates are different for different locations. For example, in Europe, VAT rates are around 20 percent. In Sweden, the rates are 25%, 21% in Spain, 19% in Germany, and so on.
The Complexity of VAT Registration Process
VAT registration is a complex process with many people, not even sure where to register in Europe. There are a lot of different markets to choose from. For example, Germany* is one of the easiest markets to expand and register in terms of documentation. Spain, on the contrary, is one of the hardest ones. You require original documents, and it takes around four months to get started there.
*Most US-based sellers are unaware of the fact that Germany is the easiest market to start selling or expanding. Why? Because they accept English documents. That means, unlike in other countries, you don't need to translate your documents into their official languages. There are specific tax authorities that only deal with American vendors. Hence, their registration period is the shortest.
In general, your registration would take between four and five weeks after you submit your documents. Even UK-based sellers have to wait for two to three months owing to Brexit uncertainty. So, there's a plus point for the US, which, as I said, many sellers don't know.
Why You Need to Register for VAT
It's good to know in advance where it's easy to get started and why. There are two reasons for this. The first one is the distance selling threshold limit. Although it is no longer valid, I would like to quickly explain the process to help you better comprehend it.
Online retailers selling from one European country to another were previously obliged to make a VAT registration in the receiving country once the threshold limit for distance selling was reached. All EU countries have a unique threshold limit. For example, in Germany, it's €100,000 while in Spain, it's €35,000.
To simplify the VAT return process for EU sellers, The European Commission has recently launched One-Stop-Shop (OSS). The OSS allows you to store goods in one market – one location in Europe – and directly deliver them to clients across the continent without the need for multiple registrations. As for its eligibility, once you make €10,000 per annum in B2C revenue, you can register for the OSS. This would eliminate the need for 27 different registrations.
What Blocks Sellers from Expanding to Europe
Now, when you would like to expand in Europe, there are a few roadblocks that you will have to overcome. The first one is the linguistic barrier. With 24 official languages spoken in Europe, it is no surprise that you will need some help keeping the conversation flowing. Because if your translation is terrible, no one will take you seriously.
If you'd like to translate your listing to different languages, check out https://translatetosell.com with the special code "Vova" for 20% OFF discount. Enjoy.
The second barrier is that VAT is obligatory, not optional. You have to register for VAT in at least one market. Most sellers dread that. VAT registration and the complexities accompanied with it refrain them from selling in Europe.
What is hellotax, and How Does it Help With VAT Registration?
hellotax is a European VAT compliance software designed to help online sellers bring transparency and simplicity to their tax processes. It caters to the needs of all EU and non-EU sellers by handling their monthly VAT and quarterly OSS filings, helping them with calculations and paperwork, finding tax advisors and partners, and administering them in an easy and seamless manner.
With hellotax, you can sell virtually anywhere in Europe.
Just to understand how the process is carried out, let's consider an example. Suppose that you are a cross-border seller from Germany. Once your sales reach €10,000, you must register with the OSS and pay the VAT in order to continue selling and shipping within Europe. The German tax authority collects your VAT and internally takes care of any obligations between the country and other tax authorities. hellotax expedites this process, ensuring the minimum amount of bureaucracy and paperwork involved.
hellotax is an all-in-one cloud-based solution that gives you full control over VAT payments. It helps you with the documentation required for VAT registration and return. It offers tax advisors and local account managers. It supports a variety of languages, so no matter whether you speak Turkish, Arabic, German, Chinese, or any other language, you can sign up for VAT online and get a free consultation.
Above all, hellotax gives you access to holistic software that does digital VAT returns and registrations across all Amazon markets. It accelerates data and process verification and monitors VAT compliance for you. Even more beneficial is the fact that the process is not just automated. There are intellects sitting behind the screen putting in their time and effort to provide you with a hassle-free experience. That said, you can say that hellotax is a SaaS solution on the front-end and a managed service on the backend.
Well, I can keep writing on the features of hellotax, but if you don't know how to utilize them, it would all go in vain. So, following the end of the slideshow, Nick explained how hellotax works. In the section below, I have described everything in a descriptive and step-by-step manner. But if you have any questions, feel free to watch the video or ask me in the comments on Facebook, LinkedIn, or Twitter.
How to Use hellotax for VAT Filing
Let's say you are a US-based Amazon seller who's registered in Germany. To use the software, sign in/up to your free hellotax account. Integrate the Amazon MWS (Marketplace Web Service) API by entering your seller ID and authorization token. Press the "Save" button, and that's it. Your Amazon account is now connected with hellotax, and it will automatically get the data required to complete VAT transactions. However, if you don't like the idea, there's also another option to manually upload.
Besides Amazon, hellotax supports several other types of integration, including Shopify and eBay. But since Amazon is the world's largest eCommerce storefront, it's featured on the front. For other platforms or to get help with any confusion, you can always consult hellotax's customer support.
Upon completion of the integration, the next step is VAT registration. Based on the country of registration, the process might take up to four months. But once the VAT is done, you can view and keep track of your performance at any time of the day.
Here's a quick rundown of what hellotax enables you to achieve:
-: Interact With Your Turnover Report :-
If you open your hellotax dashboard and click on Amazon, it will open up your turnover report, as shown in the image below:
As you can see, the report provides sales-related insights on any value date within a typical tenor. You may filter it by a variety of criteria, including Amazon FBA, own webshop, country name, and time frame.
-: Track Your Orders :-
In order to see the type of transactions you get, you can select the "Orders" option from the side menu. It will look like this:
Like the Dashboard panel, Orders also allows full interactivity. For example, you can switch between the type of transaction, which may be a sale, expense, refund, or something else — there are multiple options. Likewise, you can filter by the seller ID or channel if it's not Amazon, toggle between the time frames and countries, and do a lot more. It's like the more you explore, the better you get at it.
-: Download Returns :-
The third option on the sidebar is "Returns," which allows you to pay your VAT returns. All you need to do is open the Returns panel, download your tax return, and pay it to the tax authority.
hellotax doesn't currently support paying on behalf of taxpayers. To do so, they need FinTech partners, which is also something hellotax can help them get. The company will, however, have the feature soon, so taxpayers will be able to pay directly via Payoneer or PayPal.
The current Returns panel looks like this:
-: Bypass the Linguistic Challenge :-
The "Tax Letter Inbox" option on the sidebar allows you to communicate in many languages with various tax authorities. It automatically translates any language into German and English.
In case you are not familiar with German or English, hellotax also helps you with that. They have in-house account managers with significant command of several languages such as Bulgarian, Italian, Spanish, etc.
hellotax Pricing and Discount Information
In order to purchase a hellotax subscription, you can visit their pricing page. The company offers two types of subscriptions. The first one is for VAT compliance, while the second is for One-Stop-Shop. Both subscriptions offer different types of packages at varying rates, and both accept monthly as well as yearly subscriptions. The annual subscription, however, also includes a 20% discount. I have put a pricing table below for your visual reference.
EU VAT Compliance
OSS Reports & Filings
Now, if you checkout using my coupon code VOVA10, it will help you get a flat 10% off and a 10% recurring commission on all plans except the New Seller, that's already affordable!
How to Get hellotax Free VAT Portal and Consultation
hellotax VAT portal is 100% free. You can simply register, connect your Amazon account, and be able to oversee your data right away. Later on, when you expand your services to EU markets, you can become a hellotax client.
But I don't recommend you to just go and purchase a subscription. hellotax offers a free consultation. So, take advantage of the opportunity and ask any questions that confuse you. Don't hesitate because it's their job to address your confusion and help you make informed decisions.
This brings us to the conclusion of the post. I did my utmost to explain all there is to know about VAT — what it is, how to comply with VAT, and what OSS is — as well as hellotax — what it is, what it offers, how it operates, and all the services it provides. I also discussed how you might register for a free hellotax account and get a free consultation in addition to a discount code (VOVA10) for discount deals.
If there's any issue, feel free to reach out to me. I am always there to facilitate your selling journey on Amazon.
I hope you have a wonderful day to go along and wonderful life. Until the next post, peace out!