Achieving a Seamless Shopping Experience in Light of New EU VAT Regulations

Luca Cassina - June 30, 2021

Over 60% of global eCommerce sales take place on a marketplace and in the fourth quarter of 2020 marketplace growth doubled that of overall eCommerce. The marketplace model is disrupting both B2C and B2B industries across Europe. First movers that have already launched a marketplace are gaining a competitive advantage, and those that have not are now facing a choice: proactively leverage the marketplace opportunity or lose out to the forward thinkers and digital natives that already have.

In a world where marketplaces are seeing such marked success, it is no great surprise that authorities are looking to put in place what they deem to be a sufficient value-added tax (VAT) regulatory framework. On July 1 the new European Union VAT regulation will take effect. Find out how Mirakl is helping our customers and sellers on Mirakl-powered Marketplaces to navigate the new rules.

The new EU VAT regulation for eCommerce

According to the new regulation, certain scenarios make marketplace operators responsible for collecting VAT on sales made by third-party sellers on their platforms. For non-EU sellers or EU sellers shipping from non-EU countries, marketplace operators are liable for collecting and remitting taxes on behalf of these sellers for all goods valued below 150€ (except if customers are in France, where there is no threshold). For EU-resident sellers, the marketplace operator has joint liability for VAT payment. Sellers will now adhere to one central VAT system across Europe, unifying a once fragmented system.

At a first glance, the new regulation might seem complex for marketplace operators and sellers shipping to or within the EU. These operators might fear the regulation will create confusion for shoppers. In fact, the shopping experience for consumers will stay the same. In addition, with the right enterprise marketplace technology and tax management partners, marketplaces can easily conform to the new regulations while continuing to provide a seamless experience for customers, with prices that take into account an accurate VAT calculation.

Mirakl prioritizes the security and compliance of our technology and our customers’ marketplaces. We power 300+ enterprise marketplaces around the world, including numerous Fortune 500 retailers, distributors and manufacturers based in the US, where similar sales tax collection laws for marketplaces have been rapidly evolving since 2016. The UK also implemented a similar VAT reform to the EU in January 2021, when leading UK retailers who operate a Mirakl-powered Marketplace successfully navigated this transition.

How Mirakl simplifies compliance with the new VAT rules

Through our technology and the Mirakl Connect ecosystem, we are now supporting marketplace operators and sellers across the EU to navigate the new VAT system. After July 1, thanks to our technology our customers will continue to grow and operate their enterprise marketplace with confidence so that they can reap the benefits from operating in one of the biggest single markets in the world.

Mirakl has developed a new set of comprehensive VAT features within the Mirakl Marketplace Platform, as well as pre-built connectors with leading VAT management solutions on the market that are now available in Mirakl Connect:

  • Technology: These features include APIs to collect the structured data required to properly track and report on VAT (for example, the shipping from location of a seller), as well as order and financial workflows that have been adapted to streamline the back-office processes involved in managing an enterprise marketplace under the new VAT rules.

  • Ecosystem: Mirakl Connect continues to grow the number of value-added solutions and services for marketplaces, and now includes turn-key connectors from two of the leading tax management solutions: Vertex and Taxdoo. These connectors facilitate the management of VAT codes, computation, and reporting to help both operators and their sellers return the due VAT and meet their VAT compliance obligations.

Regulation is one of the challenges that comes with operating any business, including a marketplace. We are here to support our customers every step of the way to ensure they can focus on what’s most important - their customers. If you would like to find out more about launching a marketplace contact our team.

Luca Cassina,

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