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.
- 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 on digital services called EU VAT MOSS.
- In Canada, there's a federal jurisdiction and four provincial jurisdictions (Québec, British Columbia, Manitoba, and Saskatchewan).
A jurisdiction may impose their own registration requirements, even for businesses without any physical presence in their territory. Based on the type of product being sold and the sales volume in a given jurisdiction, a business needs to register for tax collection there.
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.
Learn how to setup your registered Tax Jurisdictions on Quaderno with our guide Setting up tax jurisdictions.The EU VAT Mini One Stop Shop (VAT MOSS)Canadian Taxes
⇒ You can also read more about taxes around the world on our blog:
Digital Taxes Around The World - Quaderno
One thing's for sure if you're a digital-based business: The rules about digital tax worldwide are constantly changing and yes, they do affect you. A widespread trend happening across countries is that governments want to charge tax based on the location of the purchaser of the product.