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Avalara Help Center

How does Avalara calculate VAT or International tax?

Overview

You want to know how Avalara calculates VAT (Value Added Tax) for international sales.

Environment

Avalara AvaTax

Resolution

  • We calculate VAT (and other international tax) using the:
    • Addresses provided on the sale to determine location
      • We apply tax in those locations based on where you have told us to collect tax in your company Nexus
    • Tax codes assigned to your items (or sent with the item) to determine taxability of the items
    • Customer specific settings based on the exemptions applied to the transaction or set up for the customer record
  • For VAT we also consider Buyer's VAT Number and Place of Supply (Importer of Record and Permanent Establishment)

NOTE:  Calculating VAT (or any international taxes beyond US and Canada) requires Global tax calculation service, ask your account manager