A cross-border transaction is a transaction type where the product is sold or purchased and where the product crosses country boundaries triggering export or import duties and taxes for the product. Connector for NetSuite SuiteTax brings a cross-border solution to provide support for cross-border Custom Duty and Import Tax (CDIT) calculation. It facilitates compliant and expeditious movement of shipments between countries. Map tariff codes to their items, calculate the duty and tax at the point of sale and communicate the necessary compliance details to the authorities so that customs clearance is seamless, and delivery is not delayed.
Before you begin
Ensure that the following prerequisites are met before creating a transaction to perform cross-border tax calculation:
- Set up AvaTax Cross-Border.
- AvaTax Account must be set up with Global and Landed Cost service type entitlements.
- Tax configuration settings must be set appropriately to get the correct default behavior for Importer of Record.
- Set the LANDED COST TAX CODE. In NetSuite SuiteTax, go to Setup > Tax > Nexuses > Edit the respective nexus > Avalara Default Tax codes tab.
- Configure items with Harmonized tariff code (HS or HSN Code). To view the added countries and tariff codes, go to AvaTax > Select Company > Settings > What you sell > Your Items tab > Details.
- In NetSuite SuiteTax, create a transaction.
- Make sure the ship-to and ship-from addresses on the transaction are in different countries.
- Add line items.
- If you, the seller, are responsible for paying cross-border taxes, under Classification, select IS SELLER IMPORTER OF RECORD.
- Select Preview Tax to see the tax calculation details in the Summary section.
AvaTax calculates cross-border tax automatically.
- Select Save.
- Select the Tax Details tab to see the various taxes calculated for the item.