Simplifying Tax Automation: Stay Globally Compliant with Odoo and Avalara

Compliance with tax regulations is a critical but complex task, especially for companies with an international clientele. The varying tax laws in the U.S., EU, and Canada, along with frequent regulatory changes, demand not only meticulous attention but also significant effort.

Avalara, a leading platform for tax automation, addresses exactly this challenge. When combined with the ERP software Odoo, it creates a solution that simplifies tax processes, ensures compliance, and saves valuable time.

Through our strategic partnership with Avalara, we are able to address our customers' needs even more effectively. We not only provide access to the solution but also offer comprehensive support with its implementation and integration.

Avalara offers tax determination as a service. Particularly in the U.S., where each state and city sets different tax rates for products, managing the correct taxes can be an enormous challenge. For example, if you run an online store, you must apply the respective tax rate based on the customer's place of residence for every order.

Avalara automates this process. The cloud-based software calculates the correct tax rates in real-time, ensuring that businesses can efficiently and accurately meet their tax obligations.

Automating tax processes offers several key advantages:

OBS Solutions has become a recognized expert in Avalara and offers the integration of this solution directly within Odoo. This combination provides numerous benefits that will optimize your business processes sustainably:

Avalara is specifically designed to meet the tax requirements across different regions of the world. The tax automation software helps businesses manage this complexity by automatically calculating the correct tax rates and ensuring all regulations are met. Here is an overview of the tax challenges and how Avalara solves them:

The U.S. is known for its complex tax requirements. Each of the 50 states has its own tax rates, and many cities and counties levy additional local taxes. This makes sales tax calculation particularly challenging for businesses.

• Sales Tax: The correct tax rates depend on the customer’s location and where the product is delivered. Avalara automates this process and calculates the exact rates in real-time.
• Nexus Rules: Businesses must collect taxes in a state where they have a so-called tax presence (“nexus”). This can arise from physical locations, employees, or even online sales. Avalara automatically identifies where nexus rules apply.
• Digital Tax Reporting: Many states require regular reporting and submissions via digital platforms. Avalara prepares these reports and helps businesses file them on time.

VAT in the European Union is another area that places significant demands on businesses. Rates vary between member states, and cross-border trade adds additional complexity.

• VAT Calculation: Avalara ensures that the correct VAT rate is calculated for each country, whether for B2B or B2C transactions.
• One-Stop-Shop (OSS): For online retailers delivering goods to multiple EU countries, Avalara supports the use of the OSS procedure. This allows VAT to be reported centrally rather than registering in each individual country.

Canada has a complex tax system with three main types of taxes:

• GST (Goods and Services Tax): A federal tax levied on most goods and services.
• HST (Harmonized Sales Tax): A combined tax in certain provinces that merges GST and PST.
• PST (Provincial Sales Tax): Provincial taxes that are levied separately from GST in certain regions.

Avalara automates tax calculations and accounts for the different requirements of each province.

In both Australia and New Zealand, GST (Goods and Services Tax) is the primary consumption tax. Companies operating in these countries must ensure that GST is calculated and remitted correctly. Avalara simplifies this process by automating tax calculations and reporting, helping businesses meet legal requirements.

Brazil has one of the most complicated tax systems in the world. Businesses must account for multiple types of taxes, including:

• ICMS (Imposto sobre Circulação de Mercadorias e Serviços): A tax on the movement of goods and services, which varies by state.
• ISS (Imposto Sobre Serviços): A service tax levied at the municipal level.

OBS Solutions collaborates closely with Avalara to provide comprehensive support in tax automation. We offer expert advice on all relevant ERP topics and manage the implementation of the software, while Avalara handles the proposal directly.

The combination of Avalara and Odoo provides businesses with a powerful solution to automate tax processes, ensure legal compliance, and save valuable resources. For companies operating internationally, this synergy is a decisive step toward efficient and compliant operations in a globalized world.

With OBS Solutions, you have an experienced partner by your side to assist you with the integration and use of the tax calculation service.