We recommend seeking advice from your accountant on the most appropriate way to handle taxes for your business, as legislation and requirements can vary significantly across regions.
Clients will often request they want the tax rate to be dynamic based on the location of the vendor and customer. Unfortunately, Shopify doesn't allow for 3rd party applications to control or influence the tax at checkout.
This means this setup isn't possible, even with Shopify Plus and the Avalara integration. As a result, tax rules will need to be implemented directly on Shopify. For example, for EU/GB marketplaces, this may mean setting up the tax settings based on the location of you and the customer. In this instance, Onport shouldn't need to be involved in the handling of the customer tax.
Overriding tax settings
When importing items from an inventory feed, it is possible to override the tax status of products on the order. For example, if you have a vendor who lists their items as not-taxable and you want to override this for them to be taxable items in your store, you'll need to adjust the inventory feed settings to automate this when publishing items:
Tax handling on purchase orders
You may want to change the handling of taxes on the invoices raised with your vendors. You can control this within the Tax tab in the dropship provider settings. For example, for EU/GB marketplaces, you may opt to tax the customer at checkout based on your store settings. Then, have the vendor invoices be VAT exempt (this default). In this scenario, the marketplace will collect and remit VAT/sales tax and the vendor invoice to the marketplace will have no sales tax/VAT.