Taxing Tech:
Simplifying Multi-Territory Trading
Elliott Winskill
Technology and Solutions Director
In today’s competitive retail landscape, more and more retailers are looking to expand their operations globally. The biggest hurdle? Fiscal Compliance.
Retailers commonly face challenges due to varying regulations in different countries. The required fiscal systems and technology differ significantly, leading to a wide range of hardware and software needs for each country, complicating integration with existing systems. Additionally, complex and resource-intensive administration and hefty non-compliance fees can be daunting – in Italy, for instance, non-compliance can result in fines up to 240% of the tax owed.
I’m here to simplify this problem for you and provide insight from a recent example involving a global retailer with physical stores worldwide, including in EU countries such as Italy.
Market Context
Many EU countries have adopted fiscal policies that require retailers to record all transactions and functions at the point of sale – even when hardware like the printer is offline. Over 21 countries have now implemented Fiscal Laws, including France, Italy, Germany, Poland, Austria, Portugal, and Croatia – and the list keeps growing. Fiscal compliance is complex because it encompasses legislation, finance, and technology. While these laws help governments recuperate more tax, they create significant complexity for retailers across Europe.
Case Study
The global retailer mentioned earlier required a software-based fiscal solution to ensure proper transaction recording in a straightforward manner. They were concerned about the anticipated costs of changes to their Point of Sale (PoS) solution to ensure fiscal compliance. Many solutions are not yet compliant, and for both solution providers and retailers, achieving compliance can be costly.
To avoid non-compliance and hefty fines, the company knew they had to update their tech. Unfortunately, when we began our conversations, they had received what I call a ‘choking quote’ to update their old PoS, which was clearly out of the question.
Finding the Right Solution
They needed a solution that would fit into their already streamlined way of working without upheaving all their systems or costing the earth. They wanted a solution to cover four specific countries and included ongoing support so they didn’t have to worry about audit processes or technical changes driven by financial or legal legislation changes.
We proposed integrating with the fiscal compliant EFSTA solution, which covers 80% of the fiscal requirements out of the box, and the PMC Graphene platform, covering the other 20%. And Bob’s your uncle! A cost-effective, fiscally compliant middleware solution that works with their existing PoS system, meaning no need for replacement. Safe to say there were very big sighs of relief!
PMC rapidly rolled out this fiscal compliant solution across the four countries. Most importantly, the solution was delivered at a fraction of the expected cost. All transactions are processed through our application at the point of completion, and we process these through our partner EFSTA, who stores and submits for when an audit is required.
We ensure nothing can be completed without processing through us, and EFSTA maintains the fiscal storage and security. The perfect team, and not to mention a huge relief for the retail giant!
With rapid, agile, custom technology solutions, you can use your existing systems to comply with any laws or IT solution problems – with minimum costs and hassle! The answer lies in smart retail-hardened integration and development capabilities.
Considerations
As retailers, overcoming these issues is a complex task. This was just one recent case that required a specific solution. There are many elements to consider:
- Unique Business Needs: No store is
the same, with different formats and processes. Anything you do has to be
unique to your business.
- Payment Methods: Do you take cash,
card, or different currencies? What about vouchers? Each of these is
treated differently by Fiscal Law.
- Multichannel Operations: You’ll
need to consider all transactional touchpoints, whether in-store, online,
via apps, and so forth.
- Managing Promotions: In our
evolving online world, promotions are a greater marketing tool to attract
leads. All promotional discounts need to be tracked under Fiscal Law.
- Global Compliance: Depending on the
country, you may need to consider exact requirements – are you bound by
terms to use certain approved hardware systems?
- Certification Requirements:
Certification now means you need to get proof that your hardware and
solution are fiscally compliant in certain countries.
By addressing these considerations,
retailers can better navigate the complexities of fiscal compliance and ensure
a smoother, more cost-effective global expansion.
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