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Who remits Landed Cost - me or my customer?

Overview

You know that you have to calculate Landed Costs, but remitting it is a seller's business decision when selling B2C.  This will be determined by what the Incoterm (transaction type) you pass to Avatax.

Environment

Avalara Avatax

Resolution

  • The LandedCost calculator currently supports two situations:

  • DAP - This acronym stands for "Delivered at Place" and indicates the Seller will be responsible for coordinating the shipping from their facility to the Buyer's door. However, the Buyer will be the "Importer of Record" responsible for paying/remitting the customs duty & import tax (including VAT) directly to the customs authorities when the shipment arrives in the destination country. Sellers may choose this situation if they are unable or don't want to pay the duties & taxes to the authorities themselves. In a DAP situation, the Seller will calculate and communicate the estimated duties & taxes at the point of sale as a courtesy, so there are no surprises when the shipment arrives. When the Buyer acts as the importer of record, the Seller has no requirements or liabilities for the importation process.
  • DDP - This acronym stands for "Delivered Duty Paid" and applies when the Seller (or their 3rd party) will be responsible for coordinating the shipping from their facility to the Buyer's door. However, the Seller will be the "Importer of Record" or their agent may be named as the "Merchant of Record" responsible for paying/remitting the customs duty & import tax (including VAT) directly to the customs authorities in the destination country. In a DDP situation, the Seller will calculate and incorporate the customs duties and taxes into the invoice at the point of sale and facilitate the import customs clearance so the end consumer doesn't have to do anything. Sellers may choose this situation to provide the best customer experience.

For examples on how to submit the correct Incoterm (transaction type) using the API - go to our developer blog post:  http://developer.avalara.com/blog/20...cost-who-pays/

 

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