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How does the Customer VAT Number field work in AvaTax?

Overview

I am working with customers in the European Union (EU), and I would like to know what impact the Customer VAT Number field has on transactions.

Environment

AvaTax

Resolution

The Customer VAT Number field contains the buyer's VAT registration ID for VAT calculations. The AvaTax calculation engine typically uses this field to determine whether or not VAT should be applied to an international sale. 

Following EU VAT ecommerce reforms in July 2021, Avalara enhanced VAT calculations to handle more complex scenarios. For EU transactions, the businessIdentificationNo field is a separate identifier that relates to the counterparty's VAT registration number in a transaction. For more information about how VAT numbers may be used in the businessIdentificationNo field in AvaTax, see CreateTransaction Document level fields on the Avalara Developer website. Middleman and Merchant VAT registration IDs can be specified at the line level as a transaction parameter. For more information, see CreateTransaction line level fields on the Avalara Developer website.

VAT Transaction Examples list