Time and again - and at present in particular - we are seeing that providers in the area of Value Added Taxcompliance are putting together lure offers for online trading that at first glance appear very attractive in terms of price.
Services are sometimes promised completely free of charge for several months or even a whole year - of course "completely without obligation" and without ulterior motives.
We at Taxdoo deal with the victims of such promotions on a daily basis - especially with online traders who always end up having to answer for their VAT obligations themselves and then feel left alone by their low-cost provider who "surprisingly" offers little or no customer service.
Unfortunately, under the impression of the supposedly large price reductions, many online retailers neglect the criteria that should actually be decisive for choosing a provider in the area of Value Added Taxcompliance.
The criteria for the choice of provider are manifold
In the "Rethinking Tax" from March 2020, we set out some central criteria for choosing a VAT service provider. These include among others:
- Does the provider offer personal contact persons who can be reached by telephone and e-mail, for example, and who respond promptly?
- What does the team structure of the provider look like?
- Does the provider also deal with the regulatory environment in terms of content - e.g. in the context of a blog and/or articles in trade journals?
- Is application documentation
provided to the online retailer?
We are convinced that much can be automated and digitized in the area of Value Added Taxcompliance for online trading. However, experience shows that almost every setup will require personal consultation at some point. Without this possibility, such a service cannot be offered - but unfortunately this is still often the case.
The ill-considered choice of provider can be expensive
The consequences of an ill-considered choice of provider can threaten the existence of the company: Sales tax risks - for example, due to non-delivery, late delivery or incorrect sales tax returns - accumulate over several months or years and across many countries, so that additional tax payments, penalties, etc. can result in previously unimagined amounts. Lost sales - for example, if a seller account is Amazon blocked due to lack of care in sales tax compliance - are added to this.
As already mentioned, the situation is made more difficult by the fact that many of the supposedly cheap providers offer no or hardly accessible personal contact persons who would be needed even more urgently in such a situation than they already are.
The basis for the choice of provider should therefore always be "full cost accounting" - and this includes the above-mentioned avoidable additional costs and lost revenues.
The past can be "cleaned up" in terms of sales tax
The good news: Even if it is better not to have such cases in the first place, most things from the past can be "cleaned up" in terms of sales tax, as we show in the following video.
First of all, you need to switch to Taxdoo, which can be done in a few steps.
Taxdoo is the compliance platform for the digital economy
... and provides the leading online traders in Europe with numerous other compliance services via a unique platform in addition to the handling of ongoing EU-wide Value Added Taxcompliance, Intrastat and financial accounting - Taxdoo is a partner of DATEV.
If you want to know more about how you Value Added Taxcan efficiently and securely map compliance, financial accounting and much more via a platform, then book your individual and free initial consultation with the compliance experts from Taxdoo!
You are also welcome to register for our regular demo webinar in which we will introduce Taxdoo and our compliance services and answer your questions personally.