Next steps after VAT exposure

Introduction

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.

Content preview:

1. Collect VAT IDs from customers
2. Enable VRN validation
3. Consider registering in the jurisdiction
4. Enable tax calculation

Step 1 — Collect VAT IDs from customers

VATVAT
A type of transaction tax levied on goods and services in more than 170 countries. Like sales tax in the US, VAT is expected to be paid by the consumer making the purchase. 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 IDVAT ID
Also known as a VAT registration number (VRN), this is the unique number that identifies a taxable business that is registered for VAT.Most businesses (and other persons carrying out an economic activity) are required to have a VAT number. Ensuring you have valid VAT IDs can significantly reduce potential exposure. See What is a VAT Registration Number?

To learn how to best collect VAT IDs from customers, check out our Playbook for collecting VAT ID numbers from international customers. After you've collected your customers' VAT IDs, instructions on storing VAT IDs in your billing system can be found on your preferred billing system's integration guide.

Step 2 — Enable VRN validation

After you've collected and stored your customers' VAT IDs, you'll need to enable VRN validation in Anrok. See What is VRN validation in Anrok?

Try enabling VRN validation in the demo above ☝️

1. In the Anrok app , go to Jurisdictions. Take me there!
2. Select the global jurisdiction where you want to enable VRN validation.
3. Under Jurisdiction details, click View services.
4. Under VRN validation, enter the date Anrok should begin validating customer VRNs for the jurisdiction.
5. When you are finished, click Enable customer VRN validation.
6. Under Tax calculation, click Skip for now.

Tip: For the most accurate exposure calculation, select a VRN validation date of your earliest transaction in that 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 have not collected your customers' VAT numbers 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:

1. Conservative approach — Register and begin to charge VAT to customers who do not provide a valid VAT ID. Customer’s with a valid VAT ID will not be charged VAT. 
2. 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:

• 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. Please contact hello@anrok.com to kick-off the process.

 Note: If you are planning to enable VAT ID validation only, you are not required to be registered for VAT. You can always choose to register at a later date.

Step 4 — Enable tax calculation

If you've decided to registration in a global jurisdiction, you will receive your VAT registration number and filing frequency once the registration is complete. After you've received this information, you can enable tax calculation for the jurisdiction in Anrok.

Try enabling tax calculation in the demo above ☝️

1. In the Anrok app , go to Jurisdictions. Take me there!
2. Select a global jurisdiction where you are registered.
3. Under Jurisdiction details, click View service.
4. Under Tax calculation, enter the following information:
   • VAT registration number for the jurisdiction
   • Filing frequency
   • Tax calculation start date
5. When you are finished, click Enable tax calculation.

 Note: Once VRN validation and tax calculation have been enabled, Anrok will be able to ensure accurate treatment of your B2B sales when calculating tax.

Introduction

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.

Content preview:

1. Register in the jurisdiction
2. Enable tax calculation

Step 1 — Register in the jurisdiction

Remote sellers with B2C sales are typically required to register, file, and remit VATVAT
A type of transaction tax levied on goods and services in more than 170 countries. Like sales tax in the US, VAT is expected to be paid by the consumer making the purchase.. If you've made the decision to move forward with registering in a global jurisdiction, you have two options for completing the registration process:

• 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 your 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. Please contact hello@anrok.com to kick-off the process.

Step 2 — Enable tax calculation

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

Try enabling tax calculation in the demo above ☝️

1. In the Anrok app , go to Jurisdictions. Take me there!
2. Select a global jurisdiction where you are registered.
3. Under Jurisdiction details, click View service.
4. Under Tax calculation, enter the following information:
   • VAT registration number for the jurisdiction
   • Filing frequency
   • Tax calculation start date
5. When you are finished, click Enable tax calculation.

Introduction

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.

Content preview:

1. Collect VAT IDs from customers
2. Enable VRN validation
3. Register in the jurisdiction
4. Enable tax calculation

Step 1 — Collect VAT IDs from customers

VATVAT
A type of transaction tax levied on goods and services in more than 170 countries. Like sales tax in the US, VAT is expected to be paid by the consumer making the purchase. 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 IDVAT ID
Also known as a VAT registration number (VRN), this is the unique number that identifies a taxable business that is registered for VAT.Most businesses (and other persons carrying out an economic activity) are required to have a VAT number. Ensuring you are collecting valid VAT IDs can significantly reduce potential exposure. See What is a VAT Registration Number?

To learn how to best collect VAT IDs from customers, check out our Playbook for collecting VAT ID numbers from international customers. After you've collected your customers' VAT IDs, instructions on storing VAT IDs in your billing system can be found on your preferred billing system's integration guide.

Step 2 — Enable VRN validation

After you've collected and stored your customers' VAT IDs, you'll need to enable VRN validation in Anrok. See What is VRN validation in Anrok?

Try enabling VRN validation in the demo above ☝️

1. In the Anrok app , go to Jurisdictions. Take me there!
2. Select the global jurisdiction where you want to enable VRN validation.
3. Under Jurisdiction details, click View services.
4. Under VRN validation, enter the date Anrok should begin validating customer VRNs for the jurisdiction.
5. When you are finished, click Enable customer VRN validation.
6. Under Tax calculation, click Skip for now.

Tip: For the most accurate exposure calculation, select a VRN validation date of your earliest transaction in that 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:

• 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 your 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. Please contact hello@anrok.com to kick-off the process.

Step 4 — Enable tax calculation

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

Try enabling tax calculation in the demo above ☝️

1. In the Anrok app , go to Jurisdictions. Take me there!
2. Select a global jurisdiction where you are registered.
3. Under Jurisdiction details, click View service.
4. Under Tax calculation, enter the following information:
   • VAT registration number for the jurisdiction
   • Filing frequency
   • Tax calculation start date
5. When you are finished, click Enable tax calculation.

 Note: Once VRN validation and tax calculation have been enabled, Anrok will be able to ensure accurate treatment of your B2B sales when calculating tax.