In today’s context of rapid globalization and increasing integration of the global economy, the internationalization of enterprises has become a key strategy to promote business development. Especially in Europe, a diverse and opportunity-filled market, enterprises going overseas is not only an important means to expand market share, but also the key to achieving sustainable growth. The European market is known for its cultural diversity, high level of economic development and mature business environment, providing unlimited business opportunities for global companies.
As the main player in the European market, the EU has been continuously improving its supervision of e-commerce trade in recent years. The entry into force of the new regulations in 2024 has had an important impact on the e-commerce sector in the EU.
According to the new regulations, from January 1, 2024, the EU will require payment service providers and cross-border e-commerce platforms established in its territory to fulfill their responsibilities for supervising cross-border merchants. And from April 1, if a cross-border merchant receives more than 25 cross-border payment transactions per quarter, the payment service provider must transmit the merchant’s information to the tax administration of the EU member states. This information will be concentrated in the European database newly created by the European Commission, the Central Electronic System for Payment Information (CESOP), and will be stored, aggregated and cross-checked in the database.
The purpose of this new regulation is to collect payment and collection information from cross-border sellers, compare it with their VAT declaration information, so as to determine the VAT payment situation and initiate tax audits against merchants suspected of underpayment or non-payment. After the amendment takes effect, e-commerce transaction information in the European market will be transparent, which means that not reporting taxes or underreporting taxes are essentially unfeasible.
Faced with this new regulation, overseas companies must increase their attention to compliance in order to maintain a steady and long-term presence in the European market and achieve sustainable development. Although compliant operations are imperative, there is no need to be overly nervous. Cross-border sellers should establish long-term mechanisms, be prepared to respond to regulatory changes at all times, and take compliance costs into consideration when designing business models to ensure the sustainability of the business model. In addition, when choosing service providers, priority should be given to compliant, professional, and responsible service providers who can provide compliant solutions and services for operations.