How Do I Handle VAT with Avalara?

Merchants using their own AvaTax account with Recurly can stay compliant with EU VAT requirements using Recurly's additional EU VAT features like invoice messaging, country invoice sequencing, and location validation for digital services customers.

 

Define a Digital Service

If you have a plan, add-on or charge that is a Digital Service, you will need to use Avalara's Tax Codes to make that distinction. When you have your AvaTax account connected, on the Edit Plan page, you will see the plan Tax Code box below the "Collect Sales Tax" checkbox. Additional Tax Code fields are found next to the add-ons on that page and on the Create a Charge page.

Talk with our Avalara representative to figure out what the appropriate tax codes are for your products in order to achieve the EU VAT Digital Services distinction. A basic Digital Services tax code that will work is D0000000.

 

Other EU VAT Features

AvaTax merchants have access to Location Validation for Digital Services evidence requirements and Country Invoice Sequencing if you require a separate invoice sequence for each EU country. These features are both found on the "Tax Settings" page, which is accessible from the top right corner of the Taxes page. Additionally, AvaTax merchants automatically have VAT Number validation turned on and will see new Reverse Charge notes on invoices with customer VAT Numbers.