E-commerce has boomed over the past decade thanks to an increased appetite by both businesses and consumers to buy and sell goods online.
Global e-commerce sales are expected to reach USD8.1 trillion by 2026, compared to around USD5.7 trillion last year. Large organisations continue to adapt to accommodate online sales while online-only businesses pop up in their thousands. In 2021, over 65 new e-commerce businesses were created across the UK daily.
Indirect tax landscape for e-commerce
For most e-commerce players, the ability to scale is a strategic priority, and many will be turning their attention abroad to increase sales and reach new markets. However, evolving global VAT and indirect tax rules are a risk to that growth and present a challenge that’s easy to overlook until a problem arises. Online businesses of all sizes selling globally are acutely affected by indirect tax and cannot afford to be complacent.
Tax authorities across the globe are implementing new digital and cross-border sales rules to recoup lost revenue from brick-and-mortar spending and ensure a level playing field.
Additionally, tax authorities are trying to keep pace with digitalisation, with some European countries drastically reforming tax reporting processes.