2023 EU changes

Avalara is enhancing the AvaTax VAT/GST Determination solution to support more complex calculation logic and content for EU Triangulation use cases. This enhancement is effective in AvaTax as of January 1, 2024.

Use case definition

An EU Triangulation use case involves two supplies of goods between three VAT registered traders in three different EU Member States, i.e., Party A (origin), Party B (or middleman) and Party C (ship to).

What is changing?

Previously, we required that the user set isTriangulation to true in the transaction request for the following use cases:

Use case 1: Purchase Party B from Party A
Use case 2: Sale Party B to Party C
Use case 3: Purchase Party C from Party B

We have enhanced our AvaTax functionality to make it optional to set isTriangulation to true in use cases 1 and 2 above.

We have also added two new parameters for use with Triangulation:

PartyCVATIDCountry: Used in triangulation to verify that Party C has provided a VAT ID for the country the goods are shipped to. Input should be 2 digit country ISO code.
PartyAVATIDCountry: Used in triangulation to identify the location of Party A and origin of the goods. Input should be 2 digit country ISO code.

Below is further information about the conditions that are required for different use cases to return the correct tax result in AvaTax. Please note that no immediate action is required as the current functionality for EU Triangulation use cases is still applicable.

Attribute/parameter	Invoice 1 - Sale Party A to Party B	Invoice 1 - Purchase Party B from Party A	Invoice 2 - Sale Party B to Party C	Invoice 2 - Purchase Party C from Party B
`type`	Sales Invoice or Order	Purchase Invoice or Order	Sales Invoice or Order	Purchase Invoice or Order
`taxCode`	Goods	Goods	Goods	Goods
`addresses`	Ship From and Ship To in EU but in different EU countries	Ship From and Ship To in EU but in different EU countries	Ship From and Ship To in EU but in different EU countries GoodsPlaceOrServiceRendered same as Ship To Country	Ship From and Ship To in EU but in different EU countries GoodsPlaceOrServiceRendered same as Ship To Country
`Transport`	Seller	Seller	None	None
`MiddlemanVatId`	n/a	EU country different than Ship From Country or Ship To Country	EU country different than Ship From Country or Ship To Country	EU country different than Ship From Country or Ship To Country
`PartyCVATIDCountry`	n/a	Same as Ship To Country. Only required if `IsTriangulation` is not passed.	n/a	n/a
`IsTriangulation`	n/a	`True`. This is optional if `PartyCVATIDCountry` is passed	`True`. Optional if `PartyAVATIDCountry` is passed.	True
`PartyAVATIDCountry`	n/a	n/a	Same as Ship From Country. Only required if `IsTriangulation` is not passed.	n/a

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