Another big news! The top service provider was "named", and a god-level reversal occurred in three days...

Recently, the entire cross-border circle was in a state of panic due to the investigation of the UK VAT (value added tax) address. This was because the address involved 11,000 companies, 70% of which were e-commerce companies, and domestic tax agency companies were also involved. Therefore, it was once called a "shocking melon" by some industry media.

In fact, this matter was exposed by foreign media at the beginning of last month, but it did not attract much attention at that time. What is unexpected is that just over a month later, this old matter was brought up again, and this time it involved many parties in the industry, causing panic among sellers and deepening the confrontation between sellers and service providers. And just yesterday, this matter took a turn.

After preliminary investigation, Yien.com found that there was something "unusual" about this incident, so it decided to follow up on the report, unraveling the mystery and trying to find the truth.

A screenshot revealed a "big melon", and a major service provider was named

Recently, the news that 12,000 UK VAT tax number addresses represented by Eurotax were investigated has spread like wildfire in the industry.

The news was triggered by the WeChat Moments of Lao Lang, an industry insider. He posted three pictures in his WeChat Moments, and wrote that the Chinese sellers had made a big deal and had already reported it to the legislator, and pointed out that the matter was related to the address of the tax agent. At the same time, one of the three pictures he posted pointed to the address with the postal code CF15.

Someone directly named "European Tax Pass" in the comment section .

Afterwards, the circle of friends was screenshotted and circulated wildly in various communities and social media. Because of the large number of cases and the frequent occurrence of bad service providers cheating sellers in the industry, panic began to spread among the seller community. Of course, Oushuitong was also included in the "bad service provider list" and was criticized.

Some people pointed out that in order to save costs, Eurotax did not even rent an office in the UK, but directly used the resident address to register VAT. After a seller found that his UK VAT registration address was also CF15, he angrily said that he would ask Eurotax for an explanation.

There are three main focuses of the incident: 12,000 UK VAT tax numbers were checked, Eurotax was related to the incident, and the address with the postal code CF15 was the place involved.

In fact, it is no longer a new thing that 12,000 UK VAT tax number addresses have been checked.

At the end of last month, many British media reported such an incident:

Last November, when Dylan Davies, a resident of Cardiff, Wales, went to check his mailbox, 580 brown envelopes containing company tax bills fell to the ground. In the following six months, he received 11,000 such letters. What's more, the British Royal Revenue and Customs (HMRC) also sent a letter asking him to pay 500,000 pounds in taxes.

Faced with the "sky-high bill" that fell from the sky , Davis was worried all day that the bailiffs would suddenly rush to his door and confiscate his property, so he went on the show to expose the matter. After an investigation by HMRC, Davis' apartment address was stolen, and most of the 11,000 companies were from China, and 70% of them were e-commerce companies.

…

The above is the general situation of the source incident.

Regarding the specific location of Davis Apartment, Yien.com looked through almost all foreign media reports and found nothing. However, in the picture of the brown envelope they disclosed, two pieces of information were found: one was the name of the company using the address. (The company is a company in a coastal city in China, proving that the misappropriation of the address to register a VAT tax number is indeed linked to Chinese sellers) and the other was the information of the tax agent. (ONEVAT SG)

Investigator: It's not that address, the incident is surprisingly reversed

In response to this matter, Oushutong also responded. In summary, it can be said in one sentence: "This matter has nothing to do with us."

On May 23, Eurotax said in an article on its official WeChat public account that the stolen address was not Eurotax’s and Eurotax had never used it. It also emphasized that its UK address was legal and compliant. In addition, it also mentioned that HRMC would keep scanned copies of all letters sent to Eurotax customers and distribute them to the corresponding sellers, and give corresponding reminders and guidance.

In order to understand the truth of the incident, Yien.com also interviewed the relevant person in charge of Oushuitong. He said that the address with the zip code CF15 did belong to Oushuitong, but it was simply "misidentified" in this case. "When the incident was first exposed, our official account followed up and published this article. If we had any problems, why would we expose them ourselves? This is a malicious rumor spread by our peers."

Just when sellers in the industry expressed different opinions on the response of Oushutong, Laolang posted a new circle of friends yesterday (May 25 afternoon). This circle of friends made the matter take a 180-degree turn.

The post on his WeChat Moments showed that based on direct communication between two people involved in the investigation, the address with the zip code CF15 was not the protagonist of this news event, and the correct address should be CF10.

Through investigation, Yien.com found that although the two addresses CF15 and CF10 belong to the same city, they are nearly 30 kilometers apart.

In addition, the detailed address of CF10 has been learned by E-EN.com, as follows:

ONEVAT SG

8 BARLETTA HOUSE

VELLACOTT CLOSE

CARDIFF

CF10 4AF

Foreign media reports have made it clear that this address has been targeted by HMRC, so sellers who have used this address face great risks and must transfer agents in a timely manner.

In addition, sellers should also pay attention to the "butterfly effect" caused by this incident :

1. HMRC is still conducting a strict investigation, and more similar stolen addresses will surely be discovered in the future. Therefore, sellers must check and verify their VAT tax number address to see if it is the tax agent’s formal office address.

Second, due to the large number of companies involved in this incident, and most of them are related to Chinese cross-border e-commerce sellers, the British tax authorities will tighten the review of VAT registration of overseas companies in the future, especially those from China.

3. Under strict supervision, the time required to issue VAT licenses in the UK will inevitably be extended in the future.

Whose cake was touched by the "eye of the storm" in this incident ?

Obviously, Eurotax has become the eye of the storm in this VAT explosion incident. Both sellers and peers have pointed their guns at it , with sellers scolding it and self-media also scolding it .

They felt very aggrieved about this : “What mistake did we make?”

Judging from the whole incident, Eurotax was dragged into this matter for no reason and did nothing wrong . If there is anything it must have done wrong, it is that it touched someone else's cake.

Industry insiders said that in the past, it was not cheap for sellers to find someone to register a European tax number on their behalf. The cost of obtaining a tax number for five European countries could be as high as 100,000 yuan. However, the emergence of Eurotax broke this situation and directly reduced the price to less than 5,000 yuan .

It is human nature to be greedy for bargains. Moreover, sellers always value profits and hope to get the highest profits at the lowest cost. Therefore, they are naturally welcome to the service providers that focus on cost-effectiveness such as Oushutong. Changing a tax agent can save a lot of money, and the cost saved is profit, so why not do it?

But this is a threat to traditional VAT service providers. Through technological changes, Eurotax has reduced the cost of VAT registration and quickly attracted a group of sellers. According to iResearch data, it has occupied the largest share of the domestic VAT market, with more than 100,000 platform users. The market is so small that if one party expands its share, the other party will naturally be squeezed.

Seeing the food that was about to reach his mouth being taken away with the bowl, who wouldn't be angry and find an opportunity to smash the bowl?

But we must know that it is difficult to block (change), but it is easy to unblock (smooth). Low prices cannot be changed, but low prices are because technological revolution has created greater value. Before the European Tax Link, the total value of the VAT tax agency industry would not exceed 1 billion. But now the valuation of the European Tax Link alone exceeds 3.5 billion. From this, we can imagine that in the future this industry may exceed tens of billions, or even hundreds of billions, and every practitioner will benefit.

In addition, sellers are also afraid of being cheated by service providers. Speaking of being cheated, many people have a history of blood and tears. From logistics, trademark registration, to store operations, the experience of being cheated is varied, but in the end they all point to one group: bad service providers. Every time there is a thunderstorm, sellers are the "most injured people."

For example, in 2021, Shenzhen Huanyi Intellectual Property Co., Ltd. was pointed out by the USPTO for illegal agency, proxy application, providing false addresses, sharing application accounts and other improper behaviors, so more than 15,000 US standards it represented were invalidated. At that time, a large number of sellers were implicated and their business was affected.

There are many service providers that have gone bankrupt. Once sellers see similar incidents, they can easily get "angry". Regardless of the truth, they will vent their dissatisfaction first and have subjectively "convicted" the parties involved.

On the surface, this incident is about VAT crash and the misidentification of the European Tax Pass. In fact, looking deeper, it is the lack of supervision in the industry that has led to frequent chaos. It takes time to establish a regulatory system, and it is impossible to solve all problems in one step. Most of the time, we still have to rely on ourselves.

So, there are two aspects of European VAT that sellers need to understand clearly: one is the situation that may lead to strict inspection of VAT by European countries; the other is what sellers need to pay attention to in terms of the existing VAT situation.

There are many and complex problems with VAT. What should sellers pay attention to?

Many people must know that since 2019, the EU has begun to implement the VAT Quick Reaction Mechanism to intensify the crackdown on VAT evasion. In addition, the EU has also introduced some new rules and measures to prevent VAT fraud and evasion.

One of the important measures is the VAT Digital Single Market, the EU VAT e-commerce reform plan. The plan officially came into effect on July 1, 2021, and aims to strengthen the management and collection of VAT on cross-border e-commerce sales. According to the plan, e-commerce sales transactions within the EU need to comply with new VAT rules, including sales thresholds, VAT declarations and payments. In addition, the EU has also implemented a series of VAT compliance measures, such as increasing VAT digital reporting and implementing a comprehensive assessment framework, to improve VAT compliance.

The following are some situations that may lead to VAT being strictly checked by European countries:

(1) Cross-border e-commerce sales: If you operate an e-commerce business outside of Europe and sell products to customers in European countries, you will need to register and pay VAT. If you fail to correctly declare VAT or fail to pay the correct amount, you may face fines and other legal consequences.

(2) Purchase or sale of high-risk products: Certain products, such as tobacco, alcohol, electronic products, etc., are considered high-risk products. If you purchase or sell such products, European countries may review your VAT reporting more carefully.

(3) Transactions from high-risk countries: European countries are more alert to transactions from certain high-risk countries. If you buy or sell products in these countries, your VAT declaration may be subject to more scrutiny.

( 4) Large-scale sales: If the sales volume is large, European countries may conduct a more detailed review of the VAT reporting.

The cross-border compliance situation in Europe is becoming increasingly severe. In the future in the European market, whether it is product compliance, tax compliance or logistics compliance, it will become a direction of strict inspection by the tax bureau, customs and government.

Regarding the current situation of VAT, sellers need to pay attention to some issues. Here are 5 practical suggestions:

(1) Register and declare VAT: If you sell products from European countries, you may need to register and declare VAT to ensure that you declare VAT correctly and comply with regulations in paying taxes to avoid fines or other legal consequences.

(2) Check the EU VAT number: Make sure the EU VAT number provided is valid. You can use the EU's online validation tool to check the validity of the EU VAT number to ensure that the VAT is declared correctly.

(3) Seek professional advice: If you are unsure how to properly declare VAT or comply with the laws and regulations of European countries, you can consult a tax advisor or lawyer to ensure your business is compliant.

(4) Automated VAT filing process: Using VAT software or services to automate the VAT filing process can reduce human errors and improve filing accuracy. In addition, automated filing processes can also reduce manual operations and time costs, thereby improving efficiency.

(5) Learn and understand the latest regulations: Keep learning and understanding the latest regulations and trends of European VAT so that you can make timely adjustments and comply with the latest regulations. You can subscribe to relevant industry news and policy updates to stay up to date.

The European market has always been a popular cross-border market, but sellers have complained about a significant reduction in profits due to various certification and tax issues. Perhaps this is the reason that has prompted many cross-border people to take non-compliant actions. Obviously, this is not a long-term way to do business.

Neither sellers nor service providers should cross this red line.

Finally, Ennet would like to call on industry insiders to work together to build a healthy and orderly cross-border e-commerce environment.

Call: jointly build a healthy business environment

The lack of supervision in the cross-border e-commerce industry is an established fact. As practitioners, since we cannot change the objective status quo, we should take responsibility and guide the industry in a healthy and orderly direction.

For example, if the incident in the article is verified, malicious rumor-mongers will not have the opportunity to take advantage of it, and the sellers will not panic.

This panic will lead to two results: First, it will deepen the conflict between sellers and service providers, and sellers will have a stronger sense of distrust in service providers. But in fact, in the cross-border e-commerce industry, service providers and sellers are interdependent and mutually beneficial. The conflict between the two sides is not conducive to the development of the industry, nor is it good for the business and service development of sellers and service providers themselves.

Second, it is not good for investment. Since cross-border e-commerce is one of the few blue ocean tracks in many industries, it has attracted the attention and layout of many investors this year. However, if panic spreads in the industry, investors will question the prospects of this industry and the safety of the projects.

Therefore, it is important to create a healthy business environment. This result is not only beneficial to one party, but its positive results will ultimately benefit every practitioner.

VAT

European Tax Pass