eClear becomes payment institution

Tuesday 4 May 2021 14:19 CET | News

German Federal Financial Supervisory Authority (BaFin) has given the tax technology specialist eClear permission to operate as a payment service across the EU for cross-border ecommerce.

The license is valid for all of Europe as part of so-called passporting, which allows companies registered in the European Economic Area (EEA) to do business in other EEA states without needing further authorisation from each country. eClear specialises in clearing VAT amounts from cross-border B2C and D2C transactions in online trading. With the BaFin license, the company can handle pan-European payment transactions for online retailers and thus pay the sales tax independently.

The company collects the funds from the end consumers and pays the sales tax directly to the responsible tax offices abroad, meaning eClear is liable to the tax authorities for the correctness of tax calculations and amounts owed. With eClear, ecommerce retailers do not have to register for tax or submit a tax return in their destination countries. According to an eClear representative, the Payment Services Supervision Act (ZAG) sets the company apart from conventional VAT compliance providers and strengthens their network of trust. As a payment institution, eClear can now offer additional services to enable their customers to grow across borders smoothly.

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Keywords: banking license, payment processing, cross-border ecommerce, cross-border payments
Categories: Payments & Commerce | Mobile Payments
Countries: Germany
This article is part of category

Payments & Commerce