Data-Driven Compliance Solution Helps EU eCommerce Merchants Avoid Fines, Customer Loss
For cross-border eCommerce businesses looking to do business within the European Union, keeping up with the complex and constantly evolving world of trade regulations — from codes, declarations, duty and tax calculations to customs clearance requirements that may vary from one country to another — can be a daunting task.
The EU Value Added Tax (VAT) rule, under which imports valued at €22 euros were not subject to the tax, was removed in July last year, further complicating the regulatory environment for many eCommerce firms that must now endure heavy bureaucracy to pay VAT on all their imports.
“Most of eCommerce goods that were declared were under €22 [and therefore exempt from tax],” Egon Veermae , chief operating officer at Estonia-based eCommerce compliance firm Eurora Solutions , told PYMNTS in an interview.
He added that these stringent regulations are in stark contrast to the U.S., where firms benefit from a $800 threshold before they are subject to tax rules.
Another challenge EU cross-border firms are facing is the requirement to now declare all the goods to customs. According to Veermae, this leads to the complex task of having to calculate different VAT rates based on where the consignee is based — for example, the standard VAT rate is 19% in Germany, while in Estonia, it’s 20% — in addition to other tax requirements firms might be subject to.
At the end of the day, companies struggle to keep up, leaving them in dire need of a solution that helps them to calculate their taxes correctly. It’s a solution that the artificial intelligence (AI) and machine learning (ML)-backed firm is offering to clients through its proprietary platform that fully automates tax, compliance and customs services.
“We have integrations with the different European customs authorities because there is not a [centralized] customs authority in Europe,” Veermae explained. […]
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