Sovos acquires VAT managed services company Accordance
Tax software provider Sovos has acquired Accordance, a U.K.-based value-added tax managed-services company. Financial terms of the deal were not disclosed.
Accordance has been a Sovos partner since 2018 and has since implemented Sovos VAT Reporting software to provide technology-enabled compliance services to its clients.
The global coronavirus pandemic has created an atmosphere of change for VAT countries as they struggle to come to terms with the financial impact of the crisis. Indonesia, for instance, just imposed a 10 percent VAT on sales by technology firms, including Amazon, Netflix, Spotify and Google, and Thailand has introduced draft legislation to impose a 7 percent VAT on sales from foreign digital platform providers. While Sovos’s competitor Vertex is embarking on a U.S. IPO plan based on the success the Supreme Court's Wayfair decision (together with the effects of the pandemic) has brought to tax automation solutions, Sovos has chosen to set its sights on the current global opportunity of VAT.
The EU 2021 E-commerce VAT Package will mark a transformation in how sellers and platforms outside the EU can import goods sold to European consumers beginning on July 1, 2021. Designed to close VAT collection gaps on transactions of every size, this e-commerce legislation will require many e-commerce platforms and direct-to-consumer vendors to appoint intermediaries — often managed services providers — to file VAT returns on their behalf. U.K. companies may also be affected by this legislation through the Brexit transition.
The Accordance acquisition is Sovos’ third this year. The company also acquired Booke, which provides educational seminars to employees of American insurance companies and the IRS on topics across property, casualty, life and health insurance sectors; and TaxWeb, a provider of tax determination software for companies operating in Brazil.
“Accordance adds a leading service provider with a robust customer base and unique VAT expertise to our growing European organization, strengthening the foundation for future global expansion,” said Andy Hovancik, CEO of Sovos, in a statement. “With this acquisition, Sovos substantially increases our operations in Europe, where we already enjoy significant scale with more than 2,000 customers being served in the region.”
“VAT legislation is complex and constantly changing, and businesses need the support of both managed services and technology to trade confidently across Europe,” added Lucy Franklin, CEO of Accordance, also in a statement. “As a global company focused on the full scope of VAT compliance needs, Sovos represents an opportunity for our clients, with a single partner for tax compliance everywhere they do business.”