Approach your global VAT exposure

If you sell primarily to B2B customers and have customers located outside of the US, you may have crossed the VAT registration threshold and have an obligation to register for VAT. Exposure is the calculation of potential tax due in a country based on the taxability of your products, VAT ID validation and tax rates. Follow the steps below to manage your VAT exposure in Anrok:

• Step 1 — Collect VAT IDs from customers

VAT is not required to be collected by the seller on B2B transactions in many countries if the customer provides the seller with a valid VAT ID. Ensuring you have valid VAT IDs can significantly reduce potential exposure. See What is a VAT ID?

To learn how to best collect VAT IDs from customers, check out our Playbook for collecting VAT IDs from international customers. After you've collected your customers' VAT IDs, you can store them in your billing system. See Send VAT IDs to Anrok for validation.

• Step 2 — Enable VAT ID validation

After you've collected and stored your customers' VAT IDs, you'll need to enable VAT ID validation in Anrok. This is essential for tracking international economic nexus exposure and ensuring tax is calculated correctly for B2B sales (in countries where applicable). We recommend selecting the VAT ID validation date of your earliest transaction in that jurisdiction for the most accurate exposure calculation. See Manually enable VAT ID validation in a global jurisdiction.

• Step 3 — Consider registering in the jurisdiction
  

Remote sellers with only B2B sales may not have an obligation to register in most countries. However, if you are unable to collect your customers' VAT IDs or if you sell to customers in jurisdictions where B2B sales are taxable, you might consider registering for VAT. There are two paths forward for B2B sellers:

• • Conservative approach — Register and begin to charge VAT to customers who do not provide a valid VAT ID. Customers with a valid VAT ID will not be charged VAT. 
  • Simplest approach — Only enable VAT ID validation and end the process here. 

If you've made the decision to move forward with registering in a global jurisdiction, you have two options for completing the registration process:

• • Use Anrok to register and file in select global jurisdictions — For non-resident EU OSS, Canada (all provinces), and the UK, where you have a taxable product, Anrok can handle the hassle of getting compliant by processing your VAT/GST/PST/RST tax registration via the non-resident scheme and scheduling when you start calculating and remitting sales tax. To initiate sales tax compliance in the jurisdiction, specify your preferred tax calculation date and tax collection method. See Get compliant in a jurisdiction.
  • Register in the jurisdiction yourself — You can choose to work with the jurisdiction's tax authorities directly and complete the registration yourself (or with the guidance of a tax advisor).
    
  • Use one of Anrok’s registration & filings partners — Anrok has established partnerships with local tax compliance firms to register and file VAT returns on your behalf at discounted rates. Our partners also provide local tax advisory support, fiscal representation foreign language assistance, foreign currency conversion and payment support. See Global registration and filing with an Anrok partner.

• Step 4 — Enable tax calculation

If you've decided to register in a global jurisdiction, you will receive your VAT ID and filing frequency once the registration is complete. After you've received this information, you can enable tax calculation for the jurisdiction in Anrok. Once VAT ID validation and tax calculation have been enabled, Anrok can ensure accurate treatment of your B2B sales when calculating tax. See Enable tax calculation in global jurisdictions.

If you sell solely to B2C customers and have customers located outside of the US, you may have crossed the VAT registration threshold and have an obligation to register for VAT. Exposure is the calculation of potential tax due in a country based on the taxability of your products and tax rates. Follow the steps below to manage your VAT exposure in Anrok:

• Step 1 — Register in the jurisdiction
  

Remote sellers with B2C sales are typically required to register, file, and remit VAT. If you've made the decision to move forward with registering in a global jurisdiction, you have two options for completing the registration process:

• • Use Anrok to register and file in select global jurisdictions — For non-resident EU OSS, Canada (all provinces), and the UK, where you have a taxable product, Anrok can handle the hassle of getting compliant by processing your VAT/GST/PST/RST tax registration via the non-resident scheme and scheduling when you start calculating and remitting sales tax. To initiate sales tax compliance in the jurisdiction, specify your preferred tax calculation date and tax collection method. See Get compliant in a jurisdiction.
  • Register in the jurisdiction yourself — You can choose to work with the jurisdiction's tax authorities directly and complete the registration yourself (or with the guidance of a tax advisor).
    
  • Use one of Anrok’s registration & filings partners — Anrok has established partnerships with local tax compliance firms to register and file VAT returns on your behalf at discounted rates. Our partners also provide local tax advisory support, fiscal representation, foreign language assistance, foreign currency conversion, and payment support. See Global registration and filing with an Anrok partner.

• Step 2 — Enable tax calculation

Once you've completed registration in a global jurisdiction, you will receive your VAT ID and filing frequency. After you've received this information, you can enable tax calculation for the jurisdiction in Anrok. See Enable tax calculation in global jurisdictions.

If you sell to B2B and B2C customers and have customers located outside of the US, you may have crossed the VAT registration threshold and have an obligation to register for VAT. Exposure is the calculation of potential tax due in a country based on the taxability of your products, VAT ID validation and tax rates. Follow the steps below to manage your VAT exposure in Anrok:

• Step 1 — Collect VAT IDs from customers

VAT is not required to be collected by the seller on B2B transactions in many countries if the customer provides the seller with a valid VAT ID. Ensuring you have valid VAT IDs can significantly reduce potential exposure. See What is a VAT ID?

To learn how to best collect VAT IDs from customers, check out our Playbook for collecting VAT IDs from international customers. After you've collected your customers' VAT IDs, you can store them in your billing system. See Send VAT IDs to Anrok for validation.

• Step 2 — Enable VAT ID validation

After you've collected and stored your customers' VAT IDs, you'll need to enable VAT ID validation in Anrok. This is essential for tracking international economic nexus exposure and ensuring tax is calculated correctly for B2B sales (in countries where applicable). We recommend selecting the VAT ID validation date of your earliest transaction in that jurisdiction for the most accurate exposure calculation. See EManually enable VAT ID validation in a global jurisdiction.

• Step 3 — Register in the jurisdiction
  

Remote sellers with B2C sales are typically required to register, file, and remit VAT. If you've made the decision to move forward with registering in a global jurisdiction, you have two options for completing the registration process:

• • Use Anrok to register and file in select global jurisdictions — For non-resident EU OSS, Canada (all provinces), and the UK, where you have a taxable product, Anrok can handle the hassle of getting compliant by processing your VAT/GST/PST/RST tax registration via the non-resident scheme and scheduling when you start calculating and remitting sales tax. To initiate sales tax compliance in the jurisdiction, specify your preferred tax calculation date and tax collection method. See Get compliant in a jurisdiction.
  • Register in the jurisdiction yourself — You can choose to work with the jurisdiction's tax authorities directly and complete the registration yourself (or with the guidance of a tax advisor).
    
  • Use one of Anrok’s registration & filings partners — Anrok has established partnerships with local tax compliance firms to register and file VAT returns on your behalf at discounted rates. Our partners also provide local tax advisory support, fiscal representation foreign language assistance, foreign currency conversion and payment support. See Global registration and filing with an Anrok partner.

• Step 4 — Enable tax calculation

Once you've completed registration in a global jurisdiction, you will receive your VAT ID and filing frequency. After you've received this information, you can enable tax calculation for the jurisdiction in Anrok. Once VAT ID validation and tax calculation have been enabled, Anrok can ensure accurate treatment of your B2B sales when calculating tax. See Enable tax calculation in global jurisdictions.