The Byte Channel & arXanum launch VAT-free EU service

The Byte Channel has collaborated with arXanum to introduce the Sell To Europe B2B service to businesses in Australasia.

The partnership aims to provide a solution that removes the Value-Added Tax (VAT) barriers for non-EU brands shipping to European distributors. This is a significant challenge for Australasian companies entering or expanding in the European market.

Typically, when Australasian brands send products to European distributors, the latter incurs a VAT charge of 20% or more upon receipt. This issue can cause cash flow constraints, reduce order volumes, increase administrative tasks, and disadvantage Australasian brands compared to EU-based competitors.

Through their collaboration, The Byte Channel and arXanum will offer Australasian businesses access to the Sell To Europe B2B service. This service facilitates entry into the European Union without VAT charges, creating a smoother experience for European wholesale partners.

Stephen Schwalger, Managing Director of The Byte Channel, commented, "We're thrilled to partner with arXanum to bring this game-changing service to Australasian businesses. Many of our clients have faced significant challenges when entering and expanding into European markets, with VAT payments creating cash flow issues for their EU partners. Sell To Europe B2B eliminates these barriers, allowing Australasian brands to compete on a level playing field with EU-based competitors while strengthening relationships with their European distributors."

This new service comes as Australasian businesses work to diversify their export markets amidst global economic changes. The European Union, with over 447 million consumers and a GDP of over €15 trillion, is a significant growth opportunity for companies.

Luigi Pezzuto, Founder of arXanum, explained, "European expansion has traditionally been complex for non-EU businesses due to regulatory and tax complications. Our Sell To Europe B2B solution simplifies this process dramatically, allowing Australasian brands to present themselves as truly local partners to European distributors, removing the VAT burden that has historically constrained growth."

The service offers several benefits and caters to various industries, such as fashion, beauty, consumer goods, and lifestyle products.

Among the financial benefits, European distributors can receive shipments without incurring VAT charges, improving cash flow and enabling more substantial orders. This can provide substantial annual savings for distributors, allowing for inventory expansion and marketing reinvestment.

Operationally, the service promises a streamlined administrative process, reducing paperwork and accelerating market entry for new products. The scheme also eliminates lengthy VAT reclamation processes, allowing companies to respond more swiftly to market demands.

Strategically, the Sell To Europe B2B service is designed to enhance relationships with EU distributors and improve the competitive positioning of Australasian businesses against European brands. This is achieved by removing financial friction points, enabling businesses to focus discussions on product innovations and market development.

Reports from early adopters indicate the service's effectiveness, with one company reporting a 35% increase in order volumes from its Italian distributor following implementation.

The service is managed through fiscal representation, negating EU company tax implications for participating Australasian brands. Implementation generally requires 4-6 weeks, and The Byte Channel provides extensive support throughout the process.

This new service supplements the previously launched Sell To Europe B2C VAT & Duty reclamation service, which allows Australasian brands to recover 70-80% of VAT and Duty on customer returns.

The Byte Channel plans to run online educational workshops in April and May 2025 to introduce businesses to the service. These workshops will provide detailed insights into implementation, cost structures, and case studies from successful early adopters.