Selling products online on social networks – business in Slovenia/EU

Selling products online on social networks is a great source of income. Also, it is a way to promote your brand with less cost. More and more individuals are thinking about starting an online commerce business in Europe. They would advertise and sell their products and services on social networks. Is business registration mandatory in this case or not? Do you know what you need to do for company registration in Slovenia?

Selling products online is becoming increasingly popular in Slovenia as well

That online sales are booming is just another testament to the way customers have changed their shopping habits. In light of the global health crisis and measures to stop the epidemic, shopping from the comfort of home has become our new reality. You can also learn about the purchases were the most common in 2020.

Selling products online on social networks as a source of income

So, in our new reality, it has become clear how important it is to move our sales online. Many people who consider to start their own businesses are the first to gain customers by selling products online on social media.

For example, Facebook and Instagram offer a service aimed at smaller retailers. Namely , those are Facebook and Instagram stores. This service can create an online store for free. It is a welcome innovation in selling products online, but it raises many questions. Do people who sell their goods or services in this way violate the Law on the Prevention of Undeclared Work and Employment (ZPDZC-1)? Does the sale on social networks need the registration of activities? When does such a sale not require  business setup?

Selling products online on social media: when do you need to register the business?

ZPDZC-1 stipulates that any activity must be registered if the purpose is profitable. Profit-making activity is any activity carried out on the market for the purpose of making a profit or as an economic activity.

“A natural person who makes a profit must register the activity accordingly. This is the case if he does not work in a dependent employment or civil contractual relationship or other form of legal work.”

• Otherwise, he does undeclared work.
• However, if there is a connection of several people without a proper basis in relation to the job, it is the so-called undeclared employment.

At DATA, our legal advisors can help you to understand the legislation. This way you can avoid fines.

Selling products online on social networks: the amount of fines

For example, if a person sells services or goods on social media (offering goods and selling them at a price higher than the purchase price), he must be registered for such a sale. If you do not register it, you perform undeclared work and violate ZPDZC-1.

A fine in the amount of EUR 1,000 to 7,000 shall be imposed on a person for an offense when he is engaged in an activity or work and has not registered it, as provided by ZPDZC-1 or other laws. You may also receive a fine for unauthorized advertising prior to registration. After all, you can also be fined for not declaring taxable income. The fine depends on the case. In the year 2019, the FURS imposed a 5.8 million EUR of fines for undeclared work. To avoid fines, we recommend using professional accounting service, like the one we offer at DATA d.o.o.

When is business registration not necessary?

If a person occasionally sells his second-hand goods on social media and does not conduct a gainful activity through a sale, registration of a business is not required. In practice this means selling products online which are second-hand goods that he no longer needs, but at a lower price at which he bought them. There is also no value limit on the sale of used items. In case you need to register a business in Slovenia and are a foreigner, you can also apply for our free webinar. Here you will find out how to set up a business.

Do you need help with your business in Slovenia, EU? Contact DATA for support!

Do you plan to start a business in Slovenia? Send us an email to [email protected]. You can also call us on +386 1 6006 270/+386 1 6006 274 (our landline). You can also use our Viber/Whatsapp +386 40 530 718/+386 64 173 023. We are also available on skype data.business7. Also, you can follow us on Facebook.