Indirect Tax Solutions for Europe

European businesses are continuously challenged to stay compliant for VAT. Our solutions work to reduce risk and support compliance in the end-to-end VAT process.

E-Commerce and Tax: The Importance of Understanding Today’s Online Tax Landscape

E-Commerce has changed the global market. Online shopping has boomed and the rise of e-commerce is providing exciting growth opportunities for hundreds and thousands of companies.

With that comes a level of complexity when trading cross-border, which some companies may not be aware of. Now more than ever, it is key that businesses pay the correct sales tax and value added tax (VAT). They also need to be aware of the tax regulations and policies they must adhere to. That means that every new border represents risk, cost, and process overhead – as well as opportunity.

Recently, there has been additional complexity around tax and tariffs. The recent events of Wayfair and Brexit impact changes in tax compliance, which is significant and can’t be ignored. From a commercial perspective, how do you overcome them, reduce risk, and prepare for the new ‘business as usual’?

E-Commerce Tax Solutions for Value Added Tax - Vertex Inc.

A Tax Solution for Your E-Commerce Business

Failing to pay the correct sales tax and VAT, or not adhering to country-specific tax regulations and policies ultimately puts your business at risk for audit penalties. With the right solution in place, retailers can turn challenge into opportunity and unlock their growth potential.

Complex global tax framework

Countries have varying tax rules and regulations, some more complex than others. There are also different rates for each jurisdiction merchants operate in, and these are constantly changing. In addition, product taxability rates are different – in the US this may also differ in each state. Tax exemptions on both products and customers must also be considered.

Legislation changes

As with Wayfair in the U.S., businesses complying with VAT systems are increasingly required to impose destination tax rates for sales to consumers in foreign countries. In 2021, The European Union is introducing a VAT eCommerce Package that will require e-commerce goods vendors to charge the VAT of the consumer’s country and permit the vendor to account for that VAT in the EU country where they are established.

Cross-Border Commerce: Remaining compliant no matter where you trade

Relying on manual research to address the increasingly complex tax regulations is difficult and can lead to calculation errors, which can mean customers are charged the incorrect tax rates or discrepancies in the amount files back to the authorities. Ensuring that taxes are correctly calculated and reported to remain compliant will reduce the risk of fines during the audit process.

Lack of resources or skills

Managing tax for an e-commerce business requires resources dedicated to constant tax research and system updates for all jurisdictions where you do business today and where you plan to expand tomorrow. Do you have the time and skills?

We help global e-commerce businesses manage the complexities of tax with confidence. We do this by providing powerful tax solutions that automatically calculate the correct tax on each transaction and help generate reports globally to help improve tax accuracy, reduce risk, and enable business growth.

Let’s connect on how our proven tax technology can help you focus on what matters most—growing your business. Complete the form below to get in touch.

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