What tax/vat rules apply for online business for online payments?


We are a global online company selling training courses that are delivered purely online. We are looking at potential partners in Brazil who will market and sell subscriptions.

On the basis that the partner will pay an upfront fee based on number of subscriptions sold, what rules and regulations should we be aware of for taxation. They will be inputting into our site their own payment merchant and the partner will be collecting all fees associated with the selling of subscriptions. Once they reach a certain level, lets say 500 sales they are then due to pay us an overage charge thereafter. The contract is on an annual basis, and will be renewed based on targets achieved during that time.

What I’m trying to establish is, what tax/vat rules would apply to us, when we are only collecting an upfront fee and/or overage charges? Is there any rules and regulations we should be aware of with a purely on-line business? As much information would be gratefully received. Thank you


Hi there,

Thank you for your question – I hope you receive some useful answers.

This HSBC video on Tax and VAT issues relating to online payments may also give some guidance.


Good luck!



Thank you William Barns-Graham for highlighting this very easy to understand video, much appreciated.

Unfortunately we are slightly different as we do not ship any product to any countries, our product it is only available on line, so import/export with actual physical property doesn’t apply.

The partner would be running the on line business within their region, taking money direct from individuals within that region (the site recognises IP ranges), therefore we would only be collecting from our partner any overage charges.

Again, thank you for responding to the question.


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