Tax jurisdiction

A tax jurisdiction is an area subject to its own tax regulations.

A tax jurisdiction can be a country, region, group of countries, province, state, city, county, district or any other area with a designated authority for tax purposes. For example:

  • In the United States, there are thousands of jurisdictions applying sales or use tax.
  • Each EU state has its own jurisdiction but they all share a common jurisdiction for VAT via the EU OSS / IOSS schemes.
  • In Canada, there's a federal jurisdiction and four provincial jurisdictions (Québec, British Columbia, Manitoba, and Saskatchewan).

A businesses cannot collect taxes in a particular jurisdiction without being registered for tax collection with their tax authorities first. That's called a tax nexus.

🔎 You can read more about taxes around the world on this article from our blog.

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