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How do I make a transaction exempt in Canada?


You want a transaction with a destination address in Canada to show as being fully exempt.


Avalara AvaTax


  • You have a few options to make the sale exempt:
    • Use Entity Use Code C) 'Tribal' on your transaction (It is exempt everywhere in Canada)
    • Create an exemption for the customer, using the Tribal exemption reason (entity use code C)
      • Ensure Canada and the Province are added to the exemption
    • Create a Product Taxability Tax Rule making the tax codes of the products non-taxable in Canada and the Province,
      • This processes the sale as non-taxable, rather than a sale to an exempt customer
    • Create an Exempt Entity Tax Rule making the Entity Use Code of your choice tax exempt in Canada and the Province


Note: We recommend processing a sale as exempt only if you are comfortable providing proof of exemption, etc. in case of audit.





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