Configuring VAT and Import Duty in Avatax

Introduction

Znode now supports VAT and Import Duty for Avatax from the 9.6.6 version. This article provides information about the features supported by Znode and how they can be configured and used.


Supported VAT And Import Duty Features

The following requirements of VAT and Import Duty are supported in Znode:

  • VAT and Import Duty calculations for all the countries configured in the Avalara account

  • Provision to configure HS Code from Avalara account for products that require Import Duty

  • Provision to set Yes or No value for “This Company Is The Importer Of Records” setting. This means the seller can decide whether the seller will be directly taking VAT and Import Duty from the buyer through the Znode application or the seller will be selling products without taking the VAT and Import Duty tax amount and when the order gets delivered, the buyer will be making payments for the same. When this setting is set to Yes, the tax details will be displayed on admin and web store screens and the seller will be responsible for collecting the tax amount from the shopper and making payments for the same to the tax authorities.

  • Provision to set a Business Identification Number (BIN) for a B2B Account from Znode admin so that the same information can be passed to Avalara APIs for tax calculations. This setting is available under Customers >> Accounts >> Manage Account - Additional attributes tab - Business Details group.
    Note: It's not mandatory to configure BIN(s) for Accounts.

  • Provision to set if the “Prices Are Inclusive Of Taxes”. This setting is available under Stores & Reps >> Stores >> Manage Store >> Tax Details tab >> Avatax section. If this setting is enabled then the product and shipping prices will be considered as inclusive of VAT and Import Duty amount and tax details will not be displayed on the Znode screens.

  • Provision to incorporate different informational messages related to VAT and Import Duty considerations for the tax calculations. These messages are included on the Checkout page of Maxwell’s Hardware and Fine Foods (default) themes.

Configuring AvaTax With Znode Store

Step 1: Configure AvaTax details in Znode

  • Login to Znode admin application

  • To configure AvaTax details for a store, navigate to Stores & Reps >> Stores >> Manage Store - Tax Details tab, enter and save all the required information.

  • To configure Business Identification Number (BIN) for the account, navigate to Customers >> Accounts >> Manage Account - Additional Attributes tab - Business section and enter and save the Business Identification Number.
    Note: This is a mandatory step for businesses that want to support VAT and Import Duty calculations.

Step 2: Configuring countries in Avalara account

  • Login to Avalara AvaTax sandbox account.

  • To configure countries for Import Duty calculations, navigate to Settings >> Where you collect tax >> Customs Duty tab.

  • Click on the “Add a country where you calculate customs duty” button and select the countries and click on the “Add selected countries” button.
    Note:

    • Countries for other taxes can be configured from the “Sales and use tax” and the “VAT / GST” tab.

    • Country and State configurations can be managed from the “Where you collect tax” settings. It is important to have a valid culture.

    • It is important to set up valid currency and culture for the respective store from the Znode admin

Step 3: Configure VAT and Import Duty settings in Avalara AvaTax account

  • Login to Avalara AvaTax sandbox account

  • To configure products for Import Duty calculations, navigate to Settings >> What you sell >> Add an item and add products one by one in the following sections:

    • Primary Information

      • Add product SKU in the “Item code” field and product name in the “Description ” field and then click on the “Next” button.


    • Assign Tax Codes

      • Add valid tax code in the “Avalara tax code” field.


      • Click on the “Add or update tariff codes” button, select Country, add the “Tariff code” and click on the “Save and define attributes” button to save the changes.

Note: Import duty will only be calculated for products that are configured in the “What you sell” section.

  • To enable that the seller is the importer of records (products), navigate to Settings >> Where you collect tax >> Customs duty tab and click on the “Details” button for any configured country, check “This company is the importer of record” setting,  and click on “Save” button.
    Note: This step can be skipped when the seller is not the importer of records. When the “This company is the importer of record” setting is enabled, only then the VAT and Import Duty will be calculated in Znode.

General Avalara And Related Settings In Znode Admin

Setting Name

Details

Prices Are Inclusive Of Taxes

  • This setting is available under Stores & Reps >> Stores >> Manage Store - Tax Details tab

  • When the Prices Are Inclusive Of Taxes field is checked, the individual tax amount will not be displayed in the Znode application screens as the product and shipping prices will be inclusive of taxes, however tax amounts will be displayed in the Avalara AvaTax sandbox account.


Calculate Tax On The Discounted Price

  • This setting is available under Admin >> Global Settings >> Promotion & Coupon Settings tab

  • When the value of “Calculate Tax On The Discounted Price” is Yes, then tax will be calculated on discounted product and shipping prices.

Include Shipping In Taxes

  • This setting is available under Admin >> Taxes >> Edit Tax

  • When “Include Shipping In Taxes” is checked, shipping will be considered for tax calculations.

General Information

  • Znode application has been tested with the Avalara AvaTax integration for the USA, Canada and Germany countries only.

  • To get the applicable tax details, the Znode application is consuming Avalara APIs for all respective functionalities like creating or managing Quotes and Order, and all calculations are managed from Avalara’s end.

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