5 International Tax Compliance Pitfalls (and how to avoid them)
5 International Tax Compliance Pitfalls (and how to avoid them)
Anticipation. Excitement. All those new customers. So many untapped markets just waiting to be explored.
Opening your business up to the world and taking your products or services across borders and into new territories is a thrilling step for any seller or business leader. You don’t need us to tell you that.
But there are a few things we can tell you that might diminish the thrill ever so slightly. And they’re to do with the complexities and intricacies of international VAT compliance.
It may not sound like the most gripping of subjects but there are multiple pitfalls and stumbling blocks you need to be aware of when making your venture across borders.
Here are 5 of the most common.
5 international tax compliance pitfalls
When you’re looking at international expansion, you need to be armed with the right knowledge about your VAT liabilities. When it comes to VAT in different countries did you know that:
- VAT always needs to be paid in the local currency and at the local rate, which can differ country to country. Currency fluctuations and exchange rate changes can make the difference between profit or loss in individual countries.
- Many countries don’t even call VAT “VAT”. In France it’s the rearranged acronym of TVA. The Spanish know it as IVA. And the Germans refer to it as MWST.
- It takes time to get VAT registration arranged in different countries. In most countries it takes roughly 3-6 weeks, but in some it can take 10 or more weeks for registration to be completed.
- With the advent of IOSS and OSS VAT compliance regulations it is a requirement that all businesses selling into European Union register for either of these programmes dependent upon their registered place of business. At Taxually we are able to manage this registration process and subsequent filings to the local tax authorities.
- There are different legislative requirements in each country for what constitutes a valid VAT invoice. What may be correct in Germany might not be sufficient in France or other countries for instance.
And there are many more things to consider to ensure you’re compliant. Like distance selling rules, local reporting deadlines, stock holding, and how you adjust your own margins per-country to name but a few.
The world of international VAT compliance can be complex and seemingly hard to navigate. But it doesn’t have to be if you have the right tools, support, and expertise to call on.
A simple solution to cross-border VAT compliance
Those tools, support, and expertise you need are readily available from Taxually.
But who are Taxually and what do we actually do?
In short, we take the pain and frustration out of cross-border VAT compliance, by providing you world-leading tech and expertise that enables you to focus on what really matters: Selling.
We’re already supporting thousands of e-commerce sellers, digital businesses, and marketplace merchants of all shapes and sizes - from SMEs through to Enterprise clients – all over the world and in all major markets as they expand their businesses and go global!
Wherever you’re based we can handle any cross-border transaction for you. There isn’t a payment permutation or location combination that can’t be managed.
It’s what our clients have come to expect, and they now trust us to help them with all things VAT compliance for three main reasons:
- Our technology is borne out of tax expertise.
Our founders have over 35 years’ experience in the tax industry between them, meaning VAT and compliance is etched into our organisational DNA.
Having spent that long in the world of tax it became apparent there was a clear opportunity to do things differently and simplify and automate the process for our customers using technology. And that’s exactly what we’ve done.
- We save you time, effort, and money whilst providing peace of mind.
Our customers save considerable time and effort with automated and instant VAT calculations. (On average our clients spend just 15 to 30 minutes per month on tax compliance. How long do you spend on it at the moment?)
They get peace of mind with adaptive deadline management so they’re always compliant with local filing dates no matter which countries they operate in.
They can plan, react, and adjust sales volumes effectively with threshold alerts meaning timely measures can be taken to avoid any late registrations or submissions.
And they can do it all from within a single platform.
- We can handle EVERYTHING end-to-end
From the very start of the chain with country registration through to VAT calculation and return filing we cover all the bases for our clients. We even cover fiscal representation which most of our competitors don’t.
We provide each and every one of our clients with a point of contact, who’s able to assist them with their VAT compliance no matter where they are or where they’re trading in the world.
