Business
Research Reveals Indirect Tax Compliance a Top Concern with Marketplace Operators and Sellers Looking to Keep Operational Challenges at a Minimum with Growing Demand for Cross-Border Sales
LONDON, May 24, 2023 (GLOBE NEWSWIRE) -- Increasingly, businesses are turning to marketplaces to sell products and services online, with three out of five
About this update from Vertex, Inc.
[{"type":"text","content":"LONDON, May 24, 2023 (GLOBE NEWSWIRE) -- Increasingly, businesses are turning to marketplaces to sell products and services online, with three out of five using third-party operators to reach a wider geographical market. Yet, according to research by Vertex, Inc. (NASDAQ:VERX) (“Vertex” or the “Company”), a global provider of tax technology solutions, a growing demand for cross-border sales is causing operational challenges. The study identifies indirect tax complexities as a concern both parties are facing and need to address. The research which surveyed 479 finance professionals globally (divided between marketplace operators and sellers) highlights that selling into new territories is a key objective for online businesses, with many using marketplaces to reach a global customer base (39%); standout amongst competitors (35%): and expand their ‘shop front’ in target markets (31%). Respondents also stated that half of their sales via marketplaces are cross-border transactions. Marketplace operators on average currently sell across 40 countries and in keeping with the boom of e-commerce, report their revenue has increased by approximately 23% over a 12-month period. Leading to marketplaces experiencing growth in both attracting more customers and sellers and expanding into more countries. 89% of marketplace operators find it difficult to manage indirect tax rules and regulations. Three quarters agree that keeping track of these obligations becomes challenging when moving into new countries. 74% of respondents also highlighted that an increase in cross-border transactions is adding complexity to the business, whilst 66% are struggling with indirect tax and financial processes. For sellers, 44% of finance professionals are unclear if they are responsible for collecting VAT or if it is the responsibility of the marketplace. This extends to their indirect tax obligations in different jurisdictions, with 36% unsure when and where they are liable for local, regional, and country-level indirect taxes and at what rate. There is major confusion over tax liabilities when there is a mix of products from multiple sellers in the shopping basket. Peter Boerhof, Senior Director VAT at Vertex commented: “As more sellers turn to marketplaces to elevate trade into new territories, they need to feel confident that operational challenges are at a mi...