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Internet Trading
Internet trading is the process of selling goods and services through the worldwide web.
Internet trading offers enormous opportunities, but also presents a number of challenges:
Opportunities:
- The size of an organisation ceases to matter. A small business with good ideas and products will be able to compete with large multinational organisations on an equal footing. This is because there is no need for a physical presence in every location in order to trade there.
- Physical location no longer matters in order to buy and sell. Therefore the choice of where to base the trading company is open and can be decided upon taking into account different tax regimes in order to minimise the tax liabilities on the profits of the trade.
Challenges:
- The preferred server site location to undertake the trade must have good communication links to the internet and have the capacity to deal with the volume of expected visits to the internet trading website.
- As with all international trade, detailed knowledge of indirect taxes (sales taxes and value added taxes) on duties is required. The difference with internet trading is that these aspects must be considered and planned for in advance so that the computer can calculate them whilst the customer is placing the order.
Dixcart is well placed to assist clients to maximise the opportunities presented by internet trading and to deal with the challenges. In particular our two ISPs - Dixcart.Net in Guernsey and DixcartNet.pt in Madeira - are both designed to assist our clients with international internet trading.
Dixcart.Net
The use of the Internet has provided businesses with the opportunity to establish trading operations in almost any location, including low tax jurisdictions. If an e-business is correctly established and trades through a computer server sited in a low tax jurisdiction it is possible for the business to pay only the low rate of tax levied by that jurisdiction.
When planning a tax efficient e-business it is very important to ensure that computer servers are physically located in the low tax jurisdiction and not just administered from that location. This is necessary to prevent a higher tax jurisdiction from taxing the trade.
Whether the trade to be handled is business to business, or business to consumer, the benefits of low tax rates can only be obtained by the establishment of a new company in a low tax location. The organisation of the e-business trade and running of the company, as well as its management and control, needs to be conducted in the tax efficient jurisdiction.
Computer servers on which the website is to be run must be physically located in a low tax jurisdiction and not just administered from the tax efficient location.
Dixcart.Net provides:
- Direct access to internet service providers in Guernsey. Dixcart.Net has close links with the major ISPs in the Channel Islands. Naturally these ISPs use computer servers located in Guernsey for e-business activities.
- E-business organised through Dixcart.Net will be administered by Dixcart directors and staff. Dixcart is an organisation with over 30 years international business experience, providing advice on how to trade in a tax efficient manner. Dixcart has the knowledge and resources to advise on the most beneficial structures for the e-business activity.
- The e-business and its computers need to be based in a low tax jurisdiction, with good computer/telecommunication links to the outside world. Dixcart.Net and its shareholders are all based in Guernsey. Guernsey is a self-governing dependency of the British Crown, which sets its own tax rates. It is, physically close to both England and France. The Channel Islands offer experienced IT specialists and a technological infrastructure with more than sufficient capability to conduct international e-business on the Internet.
Full Fiduciary Licence granted by the Guernsey Financial Services Commission