Many retailers are exploring cross-border online sales as part of their expansion plans but face the challenge of adopting an overseas strategy.

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For many retailers, ecommerce is a vital part of their business. Last year’s Black Friday event marked the UK’s biggest ever day for online sales, when an estimated £810m was spent. It is therefore no surprise that many retailers are exploring cross-border online sales as part of their expansion plans.

With a raft of varying ecommerce regulations across Europe, retailers face a huge challenge when adopting an online overseas strategy and its magnitude can often be overlooked.

Claudio Cassanmagnago, head of VAT at cost management consultancy Lowendalmasaï, says: “It is essential that retailers understand the different VAT ecommerce rules and regulations in each European member state before they enter the market.

“However, this is often fraught with difficulties. Differing procedures, changing deadlines and potential language barriers make this a complex area.”

Retailers can find themselves facing hefty fines if they are found guilty of non-compliance, which can often lead to substantial reputational damage.

Unfortunately, many businesses do not consider the different timings and procedures that a VAT registration can take, endangering the timely start of sales activities abroad.

As well as obtaining the correct VAT registrations, retailers must ensure they file the appropriate local VAT returns on time. It is also important that the VAT situation is constantly monitored as rules are subject to change.

“It is not difficult to fall foul of the rules so retailers looking to expand their online presence should seek advice at the ecommerce planning stage” says Cassanmagnago.