Create and activate a default company

Creating and activating a default company in AvaTax for VAT is a three-step process:

Create the company.
Specify that company as the default company.
Verify your distance selling threshold setting.

Create your company

For the purposes of this companion guide, we will walk through the setup process for creating a company in the Sandbox environment. This setup configures a company whose primary address is in the United States. If your company is based outside of the US, the steps will vary slightly. Simply follow the walk-through in the UI, which will guide you through the configuration.

Sign in to your AvaTax Sandbox environment.
1. Check your email for the confirmation you received from Avalara when you signed up for your account.
2. Sign in to your account using the username and link in your confirmation email.
3. Follow the prompts to create a new password.
4. Click I accept to the Terms and Conditions.
Click Get Started to begin the walk-through for adding a company. The first step is to enter your company details. This information is not verified, so technology partners can specify generic information for this test.
1. Specify your business name.
2. If your company is based in the US, then select My company's primary business location is in the US. Otherwise, select your country where your company is located and enter your Business ID number (BIN).
3. Enter your taxpayer ID (EIN).
4. Select the I do business within the European Union check box.
5. Enter your IOSS registration number.
6. If you appointed an IOSS-registered intermediary, then select that check box.
Skip the Is this a standalone company or child company? section. A standalone company is configured by default.
In the Is this an online marketplace? section, select No, this company is not an online marketplace.
Click Next when you are done.

The next section allows you to specify your company address. Enter a mailing address for your company.
If your company's primary address is in the US or in Canada, validate the address.
Click Next when you are done.
Once you've validated your company's primary address, AvaTax enables tax collection in that jurisdiction. The next step is to add more regions where this company will collect tax.
- If you are not registered to collect sales an use tax in other US regions, click No, this is complete.
- If you are registered to collect sales and use tax in other US regions, add those US regions.
  1. Click Yes, add more US regions, then choose Select from a list.
  2. Enable jurisdictions in locations where you Click Add selected regions when you are done.
  3. For regions where a sales and/or sellers use tax could apply, you will be prompted to specify the type of tax to collect. Click Next when you are done.
When prompted to confirm whether this company is registered to collect and pay tax in other countries, click Yes, add VAT/GST countries.
Select the countries where you will collect VAT, and then click Add selected regions. You must select all countries where you will conduct business (or sell/ship items), even if you do not have a physical presence in that country.
Depending on the countries you selected, you may need to select regional collection authorities or adjust international commerce settings.
- Will you include customs duty in transaction calculations?
- Is the company that you're configuring established in that country?
- Will the company that you're configuring be the importer of record on transactions? If so, then,
- Will the company that you're configuring use an import VAT deferment scheme for goods imported into a country?
Review these additional settings and then click Next.
A confirmation page opens. Review your configured tax jurisdictions. If everything looks good, click Done with tax jurisdictions.
Finally, click Activate Company to begin using AvaTax.

Set your new company as the default company

Advice: You have the option to create additional child companies within your default company. More information about adding child companies is available in the Add a child company Help Center topic. If you add child companies, and you do not specify a companyCode in a transaction, then the default company will be used to process that transaction.

Verify your distance selling threshold setting

Effective July 1, 2021, the EU is eliminating the existing country-to-country distance sale threshold and replacing that with a single, 10,000 Euro threshold. Transactions that are dated prior to July 1, 2021 will support any existing country-to-country settings. Transactions dated after July 1, 2021 will use the new checkbox setting.

As a result, the existing AvaTax EU Distance Sale UI will be updated to a single check box to reflect this legislative change. The AvaTax engine by default enables this option, thus assuming that a company has exceeded this threshold for all transactions.

Verify this setting in AvaTax by going to Settings > EU Distance Selling Threshold. This setting is enabled by default. Only change this if your company will not exceed the 10,000 Euro distance selling threshold.

Previous

Next