The service supports the following features and functionalities.

Support direct and marketplace transactions

Most e-commerce transactions involve two parties: a buyer and a seller. These transactions are referred to as direct-to-consumer or two-party transactions. In some scenarios, a third party—a marketplace—facilitates the transaction between a buyer and a seller. These transactions are referred to as marketplace or three-party transactions.

Each business model requires a distinct approach to tax calculation, liability determination, validation, and invoicing. The service supports both transaction models, enabling businesses and marketplaces to manage tax requirements consistently across jurisdictions.

Support global indirect tax calculations

The service supports a range of global e-commerce taxes, including:

• Sales and Use Tax (SUT)
• Goods and Services Tax (GST)
• Harmonized Sales Tax (HST)
• Provincial Sales Tax (PST)
• Quebec Sales Tax (QST)
• Value Added Tax (VAT)
• Import One-Stop Shop (IOSS) and One-Stop Shop (OSS)

For more information, see Supported Countries and Regions.

Perform tax calculations

The service calculates taxes based on the tax rules and rates configured in Vertex O Series. The tax rules in O Series determine which countries and regions are available for tax calculation.

To specify a specific tax mapping, include the product tax code and product tax class in your marketplace requests. If you do not specify a product tax code or product tax class, the service uses the standard rates.

The tax rate and information returned can vary depending on several factors. For example, different types of goods require different information. Physical goods often require the address where the goods are shipped.

Support liability determination

In addition to calculating the tax, the service determines which party is liable for remitting it. Liability determination also helps produce more complete tax outcomes and occurs for each transaction line.

For example, when a seller in the United Kingdom sells goods to a buyer in the same country, the seller might be liable for remitting the tax. However, when the seller sells the same goods to a buyer in Germany, the marketplace might be liable.

Set tax-inclusive and tax-exclusive pricing

The service supports both pricing models:

• Tax-inclusive pricing (common in regions like the European Union)
• Tax-exclusive pricing (common in the United States)

With tax-inclusive pricing, the merchant can offer a single price across supported countries and regions by including tax in the listed price. Send the tax-inclusive amount in the total_amount field. The service calculates the tax and returns the tax-exclusive amount (amount), the calculated tax (tax_amount), and the tax-inclusive amount (total_amount).

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Note:

A B2B transaction uses different behavior than a business-to-consumer (B2C) transaction. When using tax-inclusive pricing, the service recalculates the total_amount field to remove the tax that would have been applied to a B2C transaction. Override this behavior in the account settings.

With tax-exclusive pricing, the merchant can set prices independently for each country or region. Send the pre-tax amount to the service, and then the service returns the calculated tax_amount and total_amount.

Currency conversions

The service can convert currencies for liability determination, reporting, and invoicing purposes.

Process refunds and discounts

The service processes refunds for existing transactions and supports both tax-exclusive and tax-inclusive amounts. It automatically adjusts tax amounts according to the configuration.

The service also supports flexible discount models to accommodate different pricing strategies.

Model transactions

The service creates, stores, and manages transactions across marketplace platforms.

Model marketplaces and sellers

Configure e-commerce, marketplace, and online platforms to control tax outcomes and compliance.

Classify product delivery

The service identifies products as:

• Physical—The tangible goods shipped to a location. Liability is often determined by this location.
• Shipping—The shipping model for physical goods.

Return comprehensive tax information

The service returns comprehensive tax information for both reporting and auditing purposes.

Vertex Invoice IQ

For more information, see Vertex Invoice IQ.

Vertex Validator

For more information, see Vertex Validator.