2- and 3-party Sales

Many sales in e-commerce typically involve 2 parties, a buyer and a seller. These are known as 2 party sales. However, it can also include a third party, the marketplace itself. These are known as 3-party sales. Each of these require unique approaches for tax, liability and invoicing that the service provides.

Indirect Tax Coverage

Vertex for Marketplaces offers support for e-commerce taxes such as the following:

VAT: The European Union (EU) VAT can apply to sales where the liable party is in the EU. Domestic VAT is also supported in the UK and Australia.
SUT: Sales and Use Tax (SUT) is a tax on US sales. See Sales and Use Tax (SUT).
MVM: The Norwegian equivalent of VAT is called MVM and sales where the liable party is in Norway. See Norway (Norwegian VAT (MVM))
GST: The New Zealand equivalent of VAT. It applies to sales where the liable party is in New Zealand. See New Zealand (Goods and Services Tax (GST))
GST (Singapore): The Singaporean version of VAT. See Goods and Services Tax (GST) (Singapore) .
IOSS and OSS: See Import One Stop Shop (IOSS) and One Stop Shop (OSS).

Others are available. See Regional Tax Variations.

Tax Calculation

Vertex for Marketplaces uses the tax rate configuration that you specify Vertex O Series (Cloud) to determine the tax rate. See Vertex Cloud Indirect Tax Integration.

To specify a specific mapping, you add the Product Tax Code and Product Tax Class to your marketplace requests.

If you do not specify a Product Tax Code and Product Tax Class, the service will use the standard rates.

The tax rate that is used and the information that is returned can vary depending on a number of different factors. For example, different types of information are required for different types of goods. Physical goods often require that the address where goods are shipped to is known.

Liability Determination

In addition to tax calculation, the service also determines liability for the tax to the party who should remit the tax. This liability determination also helps drive more complete tax outcomes.

For example, if a seller in the UK is selling goods to a buyer in the UK, the liability might fall on the seller. If the same are goods are sold to a buyer in Germany, the liability might fall on the marketplace.

This process of liability assignment is known as Liability Determination.

Tax Inclusive and Exclusive Pricing

The service supports pricing that both include and exclude taxes. In many e-commerce scenarios, the price that is used can vary for different regions. For example, tax exclusive prices are used in the United States but prices tend to include tax in the UK.

If you send tax exclusive amounts, the service will return this amount and the tax inclusive amounts. If you send tax inclusive amounts, the service returns this amount and the tax exclusive amounts.

See Payment Amounts

Currency Conversion

The service includes built-in currency conversion features for transactions, reporting and invoicing. See Currencies.

Refunds

Refunds are applied to existing transactions. You can send either tax inclusive or exclusive refund amounts. The service will adjust the tax amount based on the refund. See Refunds .

Discounts

Discounts are essential and can vary from region to region. The service supports this with its discounting features, helping you to model you discounts for a global market. See Discounts.

Transaction Modeling

You can use the APIs to model the transaction lifecycle and integrate with your marketplace's store and other applications. See Transaction Modeling.

Modeling Sellers and your Marketplace

You can use settings to model your tax outcomes. For example, you can set the liability for a seller to be based on the country where the physical goods are shipped from. APIs are provided to help you manage these.

See Settings Overview.

Product Classification

The Product Class is the classification of the type of product.

The service classifies goods as one of 2 types:

Physical: Physical goods are shipped to a location. The liability is often determined based on this location.
Shipping: Services can be related to a physical good. For example, for shipping charges. They can also consists of other services such as extended guarantees.

See Product Classes.

Tax Information

The service returns detailed information in the responses from the API. See Returned Tax Information.

Invoices

Invoices are triggered when a transaction is confirmed, with variations depending on your marketplace and seller settings. See Vertex Invoice IQ.