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Add preferential treaties to customs duty calculations

This article applies to:AvaTax

Update your transaction information so that AvaTax knows where to apply preferential trade agreements to customs duty calculations. 

Preferential agreement logic relies on key transaction parameters that are applied on the item level.

Before you begin

Add trade agreement parameters to your transaction information

The transaction information (or payload) that you send to AvaTax must include specific trade agreement parameters. These parameters are applied on the Item level as part of the CreateTransaction API model. AvaTax checks for this information and applies the correct duty rate based on the Ship To address.

View a sample CreateTransaction request with trade agreement parameters 

  1. In addition to a ShipTo address, include these parameters with your transaction information:
    • CountryofManufacture
      Use the two-letter country abbreviation.
    • IsPreferredProgram
      Use True to calculate preferential treaty rates.


How AvaTax applies a preferential rate

When your transaction includes the parameters outlined above, AvaTax applies the appropriate preferential duty rate instead of the Most Favored Nation (MFN) rate.

HS Code IsPreferredProgram MFN Rate Preferential rate AvaTax's rate
HS123 True 20% 10% 10%
HS123 False 20% 10% 20%


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