What's changing?

What's changing?

Avalara is enhancing the AvaTax for VAT determination solution to respond to legislative reforms in the European Union, which are effective July 1, 2021, and UK changes resulting from their withdrawal from the EU

The following enhancements are being made in AvaTax for VAT. All changes are effective July 1, 2021.

  • Changes to distance selling threshold for combined sales of goods and services within the EU. Specifically, the EU is eliminating the existing country-to-country distance sale threshold and is replacing it with a single 10,000 Euro threshold. As as result, the existing AvaTax EU Distance Selling Threshold UI was updated to reflect this legislative change. The engine by default assumes that the threshold has been exceeded for all transactions. You can change this default by unchecking the This company exceeds the EU distance selling threshold checkbox in the UI under Settings > EU Distance Selling Threshold. Transactions that are dated prior to July 1, 2021 will support any existing country-to-country settings.
  • Low value consignment changes for ecommerce sellers selling into the EU.

Enhancements supporting current EU legislation for B2B and B2C use cases for sales and purchases include:

  • Domestic supplies when the supplier is liable
  • Domestic supplies when the customer is liable (domestic reverse charge)
  • Intra-Community supplies
  • Intra-Community acquisitions
  • Imports
  • Exports
  • Distance sales
  • Triangulation
  • General rule services
  • Digital services

EU ecommerce 2021 reforms include:

  • Deemed supplier use cases for marketplaces and merchants selling on marketplaces
  • Distance selling threshold standardization in EU
  • IOSS updates (import distance sale determination (33c))
  • Low value consignment threshold
  • OSS updates as related to determination (EU distance sale (33a/b)

UK (GB and XI) enhancements and native support for the following scenarios:

  • Native support for deemed supplier use cases for marketplaces and merchants selling on marketplaces
  • Low value consignment threshold natively
  • Special trade relationship between the EU and Northern Ireland
  • Import/export use cases
  • Domestic use cases

Additional enhancements include:

  • Address types to support the location where goods are imported and the location where goods are located when there is no transportation or where a service or event is rendered.
  • New input fields for VAT calculations, including:
    • Transport
    • IsTriangulation
    • MiddlemanVatId
    • MerchantSellerIdentifier
    • MerchantEstablishmentCountry
    • MerchantName
    • MerchantVatId
    • CustomerSupplierName
    • IsCustomerRegisteredThroughFiscalRep
    • IsGoodsSecondHand
  • These are described in greater detail in the Input fields for VAT calculations topic.

  • New configuration settings that you need to enable on your account.
  • Two new VAT detail AvaTax reports and one new marketplace audit report available.
  • Basic currency conversion capability that supports use cases where a customer needs to provide their local taxing authority with the invoice tax details in a local currency. This is described in greater detail in the Invoice currency conversion topic.
  • Enhanced VAT codes. VAT codes are generated and returned as part of the AvaTax document data at the line level. The codes may be returned to your source system and may be used to report and file VAT returns.
  • VAT invoice message and citations. For the supported EU articles, the invoice messaging and citations are returned as part of the response to enable a customer to generate a compliant invoice from their ERP.
  • IOSS updates (import distance sale determination (33c)).
  • OSS updates as related to determination (EU distance sale (33a/b).