The platform Taxation module allows to:

  • identify which of your products are taxable
  • calculate taxes based on customer's geographical location and/or type of product
  • support country specific taxes
  • support European Union's VAT rules
  • specify which customers are tax exempt

Defining a Tax Rule.

A tax rule applies to a combination of geographic location and product type. A location can be a country, or the combination of a country and state / province within that country. For each tax rule you define which the tax rate is.

Exceptions for specific country provinces.

If for a tax there are some provinces that have different rate from the rate that is applied country-wide, then you can create for these provinces a tax rule for handling these exceptions. There will be a generic tax rule that covers the whole country and tax rules for applying the exceptions.

For more details, check please Define Tax Rules

How Taxes are applied

When a customer places an order, the taxes that must be applied per order item will be calculated as following:

  • From customer’s billing address, the system will find customer location. From order item product, the system will find its product type.
  • The system will check if there are taxes that have a tax rule for the combination of customer location / product type. Each tax will be applied to order item net price.
  • In order total, there will be a line for each tax that applies to order items.

Apply VAT for Customers located in European Union

For service providers that are located in European Union we have implemented automatic validation of their customers VAT information. If they have customers that are VAT registered in an EU member state, the system checks the validity of customer’s VAT number by calling the V.I.E.S web service. This validation is applied and during customer registration from inside the storefront and when a new account is created in the BSS.

The validation of VAT number is performed using the V.I.E.S. web service provided by European Union. V.I.E.S. does not maintain itself a VAT number database. Instead, it forwards the VAT number validation query to the database of the concerned member state and upon reply, it responds to the inquirer with the information provided by the member state. This means that if a company hasn’t informed the local tax authorities that provides goods and to rest EU members, it cannot be validated from V.I.E.S. system.

For more details, please check VAT for Customers located in the European Union

Exclude Customers & Products from Taxation

Our taxation module allows to exclude customers or products for taxation. By excluding a customer or product  from taxation, the system will ignore any tax rule that may apply for this customer or product.

For more details, please check Create Tax Exemptions

US Taxation using Avalara Avatax 

Avalara AvaTax is a cloud-based solution automating transaction tax calculations and the tax filing process. Avalara provides real-time tax calculation insuring your transaction tax is calculated based on the most current tax rules.

For more details, please check Avalara - Avatax Solutions Integration

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