According to The Future of Commerce: While in-person shopping is back in full swing, e-commerce continues to thrive. In fact, experts predict worldwide retail e-commerce sales will climb from about $6 trillion US dollars to just over $8 trillion dollars by 2026.
VAT Compliance – Painful and Complicated
While we’re delighted to see online shopping increase year on year, I think it’s safe to say that VAT requirements and processes are too complex and confusing for many eCommerce businesses. From registrations, calculations and returns to reporting, the process has left some businesses feeling loaded down with the layers of complexity. It can take hours to manually manage compliance – with checks on transactions, VAT Returns, customer returns and VAT rates per country…it’s a headache for many businesses.
Customer Returns
What happens when you add another layer of complexity….the returns from Christmas and January sales? In the world of online selling, customer returns are a common occurrence. While they can seem like a hassle, it’s essential to have a proper process in place for handling returns. Not only does this ensure customer satisfaction and protect your brand reputation, but it also plays a crucial role in maintaining VAT compliance.
From a financial perspective, managing returns is particularly important in terms of VAT compliance. When a sale takes place, VAT is calculated and paid to the tax authorities within a specific period. However, if a customer returns the purchased item, the VAT paid on the initial sale can be refunded to the business. To facilitate this refund, it is vital to have an efficient returns process with proper documentation and record-keeping.
Real-time, Accurate Data
That’s where Taxmatic comes in. By automating your tax compliance processes, you have real-time data and live reporting at your fingertips. all return-related data automatically flows into the platform. This integrated data is then seamlessly incorporated into the corresponding VAT return, eliminating the risk of errors in the VAT accounting process. This ensures accurate and efficient reporting, reducing the chances of underreported or overreported VAT liabilities. Taxmatic can play a crucial role in streamlining the returns process and ensuring accurate VAT reporting. Managing returns is not just about customer service, it also has financial and tax compliance implications.
Taxmatic is helping our clients streamline their operations, cutting additional costs and helping the organisation run more smoothly thanks to a consistent and reliable solution.
Focus on Growth
When entering a new market, it can be challenging to keep the various plates spinning (growth, compliance, customer loyalty etc). We believe every ambitious retail organisation needs a partner who can manage all the compliance matters. These are often complicated, time consuming and plain well distracting. While you focus on growth, let us focus on the “other” things! If you would like to learn more, book a call with us. We will listen to your growth goal plans and offer our experience that might help you make sense of this fast moving market.
Many retailers entering the online arena are realising that the cost of online commerce is outpacing revenue. Every market is going through change and with the macroeconomic conditions set to worsen over the next decade, retailers must look at ways to maximise profitability without sacrificing their quality of service.
Taxmatic automates VAT calculations, filings, and payments for eCommerce retailers selling in EU and UK markets. It integrates seamlessly with eCommerce selling platforms to access sales order data in real time. The process includes secure payments wallet technology to complete sales tax remittance and manage refunds. Our customers have the peace of mind that comes from full regulatory compliance. Plus, the benefits of eliminating manual processes. Gaining more time to expand their online business in new international markets.
