Digital platforms, including marketplaces, face increased tax compliance pressure around the world with the introduction of new rules

OBLIGATIONS

Tax compliance for online marketplaces is a pain

Check the tax status of your marketplace participants

As a marketplace, chances are you facilitate and engage in cross border transactions. Whether your customers are business customers or consumers, you will need to verify their tax status to understand if your services require you to charge any indirect taxes like VAT/GST, etc. across the globe.

Determine correct tax rates on transactions between marketplace participants, and know when you are liable for the underlying transaction

Once you know the customer /seller tax status you need to determine the correct tax rate to be applied to transactions across the globe. What’s more, amid new marketplace regulation in the EU and the World, you will become liable for certain transactions on the platform instead of the underlying seller

Issue compliant invoices both for your and your customers’ benefit

Customers often ask for compliant invoices for accounting and compliance purposes (esp. B2B), and not meeting their demands increases customer support costs, manual work, and churn. Furthermore, platforms that resell from many different sellers and don't get invoices can have issues streamlining their accounting and compliance processes.

Ensure transactions are reported to tax authorities where needed

Transactions taking place on a marketplace can be touched by different tax regulations and can sometimes mandate real-time reporting to tax authorities. However, SMEs are often not aware of their obligations or find it hard to solve these compliance requirements which can be both a barrier for sellers to use your platform and a risk for non-compliance that can harm both your and their business.

Not meeting customer demands increases customer support costs, manual work, and churn.