Expanding to the US and beyond: don’t let tax hold you back

With business expansion front of mind for thousands of retailers, help is on hand for business leaders seeking to navigate through the world of tax compliance.

At this year’s Moonova, one of the largest marketing and digital commerce events for decision-makers across marketing, sales and product, attendees heard from Avalara’s Technology Solutions Manager EMEA, Dr. Florian Spendlingwimmer. Invited to lift the lid on the challenges DACH-based businesses are facing when considering expansion, Dr. Spendlingwimmer highlighted three key areas which require attention for ambitious business:

  1. Navigating through and understanding where the business has tax obligations
  2. The method and means by which you are required collect tax and submit tax payments in each market
  3. How to identify the correct tax rates when selling internationally. 

Consider New Markets Carefully

At a time where change is constant, during the presentation, Dr. Spendlingwinner commented: “Since the introduction of the One-Stop-Shop in Europe, there is a smaller threshold for businesses selling across the region. Set at just €10,000 it impacts nearly every merchant. Online marketplaces, although a great way to enter and test a market, are now subject to increased regulation and careful consideration needs to be given to the channels which you plan to sell through”.

Dr. Spendlingwinner continues: “When you’re ready to expand internationally, you need to carefully consider what channels you want to expand into.

“In the example of a German businesses seeking to expand further afield, the natural first step might be to enter the Austrian market. This progression is made easier by the fact that there’s no need to translate your checkout or your website. This can be a good way of testing your expansion plans and building your understanding of tax requirements and compliance. However, where the complexity comes in, is when there is desire to expand further afield – into the United States for example. Business might understandably assume that having expanded into one market successfully, the route to entry will be similar. Unfortunately, it’s not the case. In fact, it becomes even more complex!”

Since the start of 2022 the industry has seen a raft of changes come in which have drastically changed the landscape. From updated HS codes through to new tax justifications in the US – staying on top of your obligations requires constant monitoring. For European suppliers selling into America, there may be a scenario where your business has stock across multiple states. With around 14,000 tax justifications on the continent alone, you’re likely to need some support navigating your way.

Understanding what might trigger new tax obligations for your business from the outset and staying up to date with the ever developing compliance sector is imperative to continued success.

Prepare for Change

If you’re a DACH-based business keen to expand into new markets or are scaling up operations, Dr. Spendlingwimmer’s presentation is available to playback (recording in German).

In addition – check out Avalara’s Tax Live blog, an up-to-date resource available to readers to help keep updated with upcoming changes. Our specialists have unparalleled knowledge and expertise in all aspects of tax compliance, wherever your business is based. From helping you understand your tax obligations through to automatic tax returns, we can help you grow.

If you’re ready to take the next step and want to take the complexity out of compliance, get in touch with Avalara for a no obligation call. 

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