As part of the July 2021 VAT ecommerce reforms, the European Union (EU) replaced country-specific thresholds for collecting VAT with a single threshold of 10,000 EUR for all EU countries. By default, AvaTax assumes that you sell more than the new threshold and calculates VAT for transactions in EU countries.
Update your Distance Selling Threshold setting if you sell less than 10,000 EUR in combined sales of goods and digital services between EU countries (or between Northern Ireland and EU countries).
Before you begin
- AvaTax assumes that you sell more than the new distance selling threshold. If that's true for your business, no action is needed.
- Transactions dated prior to July 1, 2021 support preexisting country-to-country settings.
- Speak with a tax professional to make sure that you don't need to register to collect and pay tax in an EU country. Always check the local laws wherever you do business.
- In AvaTax, go to Settings > All AvaTax Settings.
- Next to EU Distance Selling Threshold, select Manage.
Only a person with administrator access can view this setting.
- Click the setting to select or deselect it.
This company exceeds the EU distance selling threshold
This option should stay checked if you sell more than 10,000 EUR in combined sales of goods and digital services between EU countries (or between Northern Ireland and EU countries).
A success message appears after the setting is changed.
Old country-to-country thresholds
A previous version of this AvaTax setting was used to manage individual country-to-country thresholds. Your old threshold settings remain visible for recordkeeping purposes. Transactions dated prior to July 1, 2021 support any prior country-to-country settings.
In light of the new EU VAT legislation, country-to-country thresholds don't apply to transactions dated July 1, 2021 or later.