This example shows how to create a simple transaction where the Avalara client is a marketplace. The process for creating this transaction is actually done in two API calls, where a merchant is selling a product to the marketplace so that the marketplace can be responsible for the VAT.

The first transaction is a purchase from the third-party seller to the marketplace.

The second transaction is a sale from the marketplace. In this case, the marketplace is responsible for the VAT.

Advice:
Make sure that you selected Yes, this company is an online marketplace that connects many sellers to customers on a single platform when setting up your Avalara client as a marketplace. See Set up an Avalara client as a marketplace.

Returned invoice messages

None

Related articles

The following are returned when your transaction is run using "debugLevel": "Diagnostic":

Transaction 1:

Article 31

Article 193

Transaction 2:

Article 33.c

Article 193

Expected Deemed Supplier: Marketplace

Assumptions

This scenario assumes the following:

Transaction 1:

The document type is a purchase invoice.

This goodsPlaceOrServiceRendered country is Austria.

The merchantSellerIdentifier is M6462.

The MerchantEstablishmentCountry is US.

This country should not be in the EU.

The businessIdentificationNo is ATU12233456.

Neither party is responsible for handling the transportation of the physical goods. (Transport is None.)

Transaction 2:

The document type is a sales order.

The shipFrom country is Iceland.

The shipTo country is Germany.

The merchantSellerIdentifier is M6462.

The MerchantEstablishmentCountry is the US.

Keep in mind the following when using VAT input fields in marketplace transactions:

The MerchantVatId indicates the merchant’s VAT number. Most marketplaces collect this kind of information as part of an onboarding process. Users pass this value at the line level.

The merchantSellerIdentifier, MerchantEstablishmentCountry, MerchantName, and MerchantVatId fields should only ever contain the values of the merchant on the marketplace that are relevant to the goods referenced on that transaction line. These fields should never refer to the Avalara client.
- If the Avalara client is set up as a marketplace and is selling its own products, leave the above fields blank or omit them from the request. This is because AvaTax will assume that when these fields are blank, the items belong to the Avalara client and, therefore, won’t apply the deemed supplier logic.

Regardless of the taxCode type (freight, physical, digital, and so on), the MerchantEstablishmentCountry will always be the same whenever the related merchantSellerIdentifier is used. For example, if Line 1 has merchantSellerIdentifier = "Seller123" and MerchantEstablishmentCountry = "CH", then those values should be used for every line where the merchant is Seller123.

The MerchantVatId is the merchant’s VAT number. Most marketplaces collect this kind of information as part of an onboarding process. This value is passed at the line level.

For EU transactions, the businessIdentificationNo is a separate identifier that relates to the counterparty's VAT registration number in a transaction. This is passed in the document level.
- When the document type is SalesOrder or SalesInvoice, this is the final customer's VAT number. It is only relevant for B2B transactions. When populated, it must include the VAT country two-digit ISO code prefix (e.g. “DE123456789"). This can be an empty string or omitted entirely for B2C transactions.
- When the document type is PurchaseOrder or PurchaseInvoice, this value represents the vendor’s VAT number.

customerSupplierName is the counterparty’s name and is passed at the document level.
- If the customer supplier is a company, then pass the company name and legal form (for example, Final Customer GmbH).
- If the customer supplier is a private individual, then you can choose to use an ID, you can pass a full name, or you can simply use PRIVATE INDIVIDUAL.
- AvaTax doesn't validate this field; it only passes this value back in reports that are designed for audit purposes, such as the Marketplace Audit Report found in Reports section in the AvaTax UI.

Examples

Transaction 1 request

Transaction 1 response

Transaction 2 request

Transaction 2 response