Kerry fintech Taxamo agrees deal with Deloitte

Fintech collaborates with accountancy firm for automated digital tax compliance service

Taxamo founder and chief executive John McCarthy

Taxamo founder and chief executive John McCarthy

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Kerry fintech Taxamo has agreed a new multimillion euro deal with Deloitte that it says is a “ game-changer” for the company.

The Kilorglin-based company has teamed up with the accounting giant for a digital tax compliance service for online marketplaces and sellers, which has launched ahead of the introduction of new VAT reporting requirements early next year.

The service allows online sellers to register for VAT, automatically determine the correct treatment of sales, and to submit returns and remit payments to tax authorities.

Starting January 1st 2021, the European Union is implementing new VAT rules on the cross-border trade of products sold through online platforms such as Amazon and Ebay.

Member states last month reached agreement on detailed measures aimed at simplifying VAT rules for the sales of online goods. The new rules, which follows measures agreed in 2017, should also help the EU to recover up to €7 billion a year in tax revenues that are lost every year due in part to fraud.

Market

Taxamo was founded and is led by John McCarthy. The son of Fexco founder Brian McCarthy and brother of the financial services group current chief executive Denis McCarthy, he established the business in 2011 to provide an EU VAT compliance solution to e-service merchants. The company employs 24 people and clients include SurveyMonkey, Teamwork and Penguin Random House.

Speaking to The Irish Times, Taxamo chief executive Mr McCarthy said the Deloitte deal was a major win for the fintech.

“If you look at the ecommerce market in general, over 60 per cent of online transactions have been through marketplaces. Effectively, this collaboration with Deloitte allows us to treble our addressable market,” said Mr McCarthy.

He added the company intended to take on an additional 10 employees as a result of the new deal.

Deloitte UK’s managing partner for tax and legal Matt Ellis, said the new service would be welcomed by sellers. “Nine months from now, hundreds of thousands of online sellers will have new obligations to account for VAT in the EU on their sales. European VAT rules have the potential to be complex to administer for these global businesses,” said Mr Ellis, who is also deputy chief executive of Deloitte UK.