The digital economy has been one of the few markets that boomed during the pandemic — so rapidly, in fact, that IBM’s US Retail Index shows digital retail has advanced by roughly half a decade in under a year.
But ecommerce isn’t the only product-based business that saw success in such a trying time for companies worldwide. Consumer (both businesses and the general public alike) needs immediately shifted. Suddenly, a vast majority had to have the digital capabilities to work from home. Digital goods were in demand as new ways to communicate were necessary, leading internet-accessible software providers like Zoom to experience a 300% increase in its global user base.
In instances where demand spikes so rapidly, a business’s tax obligations could change overnight. Trading in new markets and different countries triggers the need to register for tax, as physical presence in a country is not necessary when abiding by their tax requirements.
So what do businesses that operate digitally, sell digital products, or provide online services do when they find themselves stuck with new tax responsibilities? It can be complicated to manage jurisdictions, charge the correct rates, and organise tax returns for businesses that do not have dedicated financial resources or are smaller businesses that find themselves on a global scale.
The way out of this administrative nightmare could be a software provider itself. Tax automation software doesn’t require country by country information; therefore, it can eliminate issues for businesses finding it difficult to manage cross border tax requirements.
To help digital businesses overcome growth and operational challenges when expanding internationally, Avalara is hosting a webinar on 23 March 2022 with guest FinancialForce – a free to attend session where experts will be providing advice about how businesses can accelerate their expansion strategies. Sign up here to secure your spot.