Written by FirmEU Team
In today’s digital world, efficient payment solutions are crucial for businesses to thrive. For companies operating under the Travel Agent’s Margin Scheme (TAMS), this is no exception.
This scheme comes with unique challenges and opportunities in managing payments, highlighting the need for effective payment solutions.
In this blog, we will be sharing everything you need to know about TAMS and where you can find the best solution for all your business needs. So if you are looking for answers or solutions for your business needs, this blog is for you!
The Travel Agents’ Margin Scheme (TAMS) is a rule that makes handling taxes easier for travel agents. It’s used when they buy services like transportation, hotel stays, or tour guides from others (third parties), then sell them as a package to travelers.
This rule changes where the service is supplied from, how much tax should be paid, and how much tax can be taken back.
In simple terms, TAMS allows travel agents to calculate and pay taxes based on the profit margin they make, rather than the full price of the services they sell.
This helps them avoid double taxation so they can stay competitive and profitable in the travel industry.
Understanding how TAMS works is pretty straightforward! Let’s say you own a travel agency that sells vacation packages. You buy flight tickets, hotel stays, and tour guides from third-party providers at a discounted price.
However, when you sell these packages to travelers, you include the full price of the services in your package.
This means that if regular tax rules were applied, you would have to pay taxes on the full price of the services, despite receiving a discount from third-party providers.
However, with TAMS, you only have to pay taxes on the profit margin you make from selling the package. So in simple words, you are saving taxes on the discounted price you received from third-party providers.
This not only helps you save money but also allows you to offer competitive prices to your customers so you can thrive with your business.
Here are some of the key advantages of TAMS:
1. It simplifies tax calculations for travel agents, saving them time and effort.
2. It reduces costs for travel agents as they only have to pay taxes on their profit margin instead of the full price of services.
3. It helps travel agents stay competitive in the market by offering lower prices to customers.
4. It ensures fair taxation for travel agents by not taxing them on discounts received from third-party providers.
5. It promotes transparency and compliance in tax payments, reducing the risk of audits and penalties.
Opening a bank account for TAMS is similar to opening a business account for any other type of company – here are the steps you need to follow:
1. Choose a bank: Start by researching and comparing different banks to find one that offers business accounts for TAMS companies.
2. Gather necessary documents: You will need to provide proof of identity, such as a passport or driver’s license, along with documentation proving your business registration and tax identification number.
3. Complete the application: Fill out the necessary forms and provide all required information, including your business details, owners’ and directors’ details, and any other documentation requested by the bank.
4. Wait for approval: The bank will review your application and documentation before approving or denying your request for a business account.
5. Set up online banking: Once your account is approved, you can set up online banking services to manage your account conveniently.
Looking for a secure, fast, and transparent way to open a bank account for your TAMS company?
Firm EU is here to help:
We have partnered with many reputed banks to offer quick and hassle-free bank account opening services for TAMS companies. Here are some of the banking stuff we can help you with:
All your banking needs are taken care of by our team of experts, allowing you to focus on growing your business.
To arrange payment processing for your TAMS company, follow these steps:
1. Research payment processing options: There are many payment gateways and processors available in the market. Research and compare their services, fees, and integration options to find one that best suits your business needs.
2. Gather required documents: Similar to opening a bank account, you will need to provide identity proof, business documents, and tax information to set up payment processing for your TAMS company.
3. Choose a payment processor: After evaluating your options, select a payment processor that offers the features and services you need at competitive rates. FIrmEU can arrange 1.5% – 2% in processing fees, which is lower than almost everyone (up to 2% lower)
4. Choose a payment method: From credit cards to digital wallets, there are a variety of payment options available. Consider your target market and their preferences when selecting payment methods. With Firm EU, you will have the options for:
4. Integrate with your website or app: Once you have chosen a payment processor, integrate their services with your website or app for seamless and secure transactions.
5. Test and launch: Before going live, thoroughly test the payment processing system to ensure it is functioning properly. Once you are satisfied with the results, launch your TAMS company’s online payment options.
Here are some of the important payment methods for TAMS companies:
One of the major payment methods for TAMS companies is – Split Payments.
As the name suggests, when a customer chooses to pay using multiple payment methods like a combination of credit and debit cards, digital wallets, or any other payment method, it is called a split payment.
This can be useful for customers who do not have enough funds in one account to make a complete payment.
One of the most common and vastly used payment methods, credit and debit cards are essential for TAMS companies to accept online payments. These cards allow customers to make purchases using funds from their bank account or available credit limit.
Digital wallets such as PayPal, Venmo, Apple Pay, Google Pay, etc… are rapidly gaining popularity. These options are easy, touchless, secure, and convenient for customers to make online payments.
Alternative payment methods refer to any form of payment that is not cash, credit, or debit card.
Some examples include bank transfers, e-wallets, prepaid cards, and cryptocurrency payments. By incorporating alternative payment methods, it will be easier for TAMS companies to attract a wider customer base.
So there you have it! Now you know how TAMS works and how you can take full advantage of it. All you need is a secure and reliable payment processing company such as Firm EU to handle all your transactions. With the right payment methods in place, you can take your business to the next level. So make sure to check out Firm EU and thanks for reading!
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