So, you’ve spent time and valuable resources planning your journey to the stars and have successfully landed on your new planet. What now? Well, any self-respecting astronaut needs one more crucial thing to thrive – A base. Everyone needs a place they can call home, a refuge that offers protection from those hostile alien environments, & the world of global E-commerce is no different.

Building an e-commerce presence in foreign markets that is capable of navigating the asteroid field of local laws and customs is tough and challenging, but we’ve partnered up with AVASK, who are a leading players in the field of e-Commerce tax compliance and business management, to enable you to have a better understanding of how to build that base and ensure that your business can thrive.

What are the benefits of having a physical company presence in EU countries?

Broadly speaking the primary advantage of having a physical presence within the EU & UK is that a local agent is there to act as a ‘base’ & ‘gate keeper’ for your e-commerce business. They will use their expertise to collate, filter and deal with all the locally raised inquiries appropriately; solving the problem of being bombarded with questions on matters that you’re unlikely to know the answer to.

More specifically their expertise can help to protect your business in a multitude of areas from Port of Entry issues to accurate local tax reporting and compliance.

Let’s take a look at some of these issues in more detail.

What common taxation problems do e-Commerce companies face when operating in new markets?

It’s true to say that the ‘borderless’ nature of e-commerce may well present huge potential growth and revenue streams for those with great products and ideas. However, it’s also clear that this can present investors with their biggest obstacle too, in that each country has slightly different procedures when it comes to tax registration. This may not have been such a problem a few years ago but more recently both UK & EU state Tax Authorities have begun to take a much stronger pro-active approach to e-commerce tax non-compliance. This can have serious implications for those under investigation.

What forms do the compliance legislations & investigations take?

Each individual country operates in a different way but, as an example, in the case of the UK there has been legislation passed to make the selling platform jointly liable for any no paid taxes from any non-compliant company or seller. In addition, the UK tax authority (HMRC) is using its Online Compliance Team to randomly contact e-commerce sellers requesting information on their sales tax status (VAT).

What are the implications if my company is tax non-compliant?

AVASK say that all e-commerce companies are liable to be sanctioned in the case of non-compliance. At the selling platform level this can lead to your platform issuing you with a suspension notice and can occur between 7to 60 days after being issued with the request for compliance.

At the Tax Agency level HMRC has the power to impose severe penalties for non-compliance. These sanctions can take the form of suspension and de-listing, as well as financial penalties such as re-payment of taxes owed, suspension or de-listing from their sales platform whilst under investigation. In some countries this can represent up to 10 years of backdated tax, in addition to any other punitive charges or penalties for late payment that may be imposed by the authorities.

Obviously, these issues present a credible and serious threat to many companies’ operating within the EU & UK e-commerce market places and clearly there are two key takeaways from this. Firstly, that it’s always more advantageous to be fully tax compliant, rather than just hoping for the best, whilst secondly it doesn’t matter where you travel in the universe, or which planet you land on, you know that there will always be strict tax law enforcement waiting!

How can an agent help with tax compliance?

The role of the agent is to work proactively on your behalf to pre-empt these issues and make sure that your company is fully tax compliant within each territory that it operates within. Companies like AVASK Accounting & Tax have years of experience about EU & UK tax compliance and are experts at assessing how best to protect your business in the sometimes-hostile environment of e-commerce space. You can connect with Melanie who is an EU/UK Tax Expert:

What Port of Entry issues can affect my e-commerce business?

A recent change to the UK customs code at point of entry has led to occasions where goods have custom clearance issues due to non-payment of import tax. Having this situation occur to any company is obviously extremely costly, and therefore shipping agents are under increasing pressure to find tax representatives that are already prepared for that change.

AVASK are able to offer a locally based and pro-active agent solution to this issue that understands the constantly changing landscape of import taxation, meaning that your valuable shipments will not be delayed or impounded at Port of Entry.

How can my business ensure its tax system and standardization procedures?

A major problem regarding tax is not simply if it has been declared & collected correctly on the sales platform but also that it is reported in a likewise fashion to the relevant tax agency. Indeed, like so much of the nuanced approach that is required for pan European e-commerce, each company benefits greatly from being able to have eyes and ears on the ground within the target territories that understand and are well prepared for the correct methods of local tax reporting.

AVASK believe that by using an Amazon MWS connector in conjunction with their own tax system they’re able to download all sales activity independently, accurately and in line with all EU and UK reporting guidelines.


We hope that this section of the guide has been useful in helping you to understand and navigate some of the potential peaks and craters that make up the new and exciting worlds you want to explore. That said, we know how important it is to have that safe secure base to work from, so you should consult an expert in the field, like AVASK Accounting & Tax, to make sure that your business rockets to success!