Add preferential treaties to customs duty calculations
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
- What trade agreements are supported?
Currently, this feature supports the United States-Mexico-Canada Agreement (USMCA) and the UK-EU Trade and Cooperation Agreement.
- You are responsible for obtaining and storing certificates of origin.
Using the IsPreferredProgram parameter indicates that you possess a certificate of origin or other required verification for receiving preferential rates.
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
- 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.
- CountryofManufacture
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% |