# Tax Remitter Settings Violet provides configurable tax remitter settings that determine how tax collection and remittance responsibilities are handled. These settings can be customized at both the app and merchant levels to align with compliance requirements and business preferences. ## Tax Remitter Methods ### Marketplace as Tax Remitter **How It Works:** * The Channel (i.e., your marketplace) is responsible for collecting and remitting taxes on behalf of merchants. * The marketplace manages all tax calculations and ensures compliance with tax laws. * The marketplace manages all tax reporting and remittance obligations to relevant tax authorities. {% hint style="info" %} Violet can assist with tax calculations and reporting by providing the tax rates used by merchants in the [Estimate Cart API](/api-reference/orders-and-checkout/cart-pricing/estimate-cart.md), but the marketplace is ultimately responsible for tax compliance. {% endhint %} **Application / Use Case:** * Suitable for businesses that want to assume tax compliance responsibilities for their merchants. * Beneficial for platforms operating in jurisdictions with marketplace facilitator laws requiring marketplaces to handle tax compliance. ### Merchant as Tax Remitter **How It Works:** * Individual merchants are responsible for collecting and remitting their own taxes. * Violet provides detailed tax calculations per transaction, based on the tax codes set up by the merchant in their ecommerce platform. * Merchants handle all tax reporting and payments to relevant tax authorities. **Application / Use Case:** * Ideal for businesses that prefer to delegate tax compliance to their individual merchants. * Suitable for marketplaces with established merchants who have their own tax compliance processes. * Appropriate for platforms operating in regions where merchants are legally required to handle their own tax obligations. ## Choosing the Right Tax Remitter Setting When selecting a tax remitter method, consider the following: **Choose Marketplace as Tax Remitter If You Need:** * To centralize tax collection and reporting. * To provide a simplified merchant experience. * To comply with marketplace facilitator laws. * To maintain greater control over tax compliance. **Choose Merchant as Tax Remitter If You Need:** * To delegate tax responsibilities to individual merchants. * To work with merchants who prefer to manage their own tax compliance. * To operate in jurisdictions where merchants must handle their own taxes. * To separate marketplace and merchant tax obligations. Depending on the tax remitter settings and your transfer settings, Violet will automatically disburse tax to the designated entity when the order is placed. This data is available on the Distribution record. {% hint style="info" %} Tax remitter settings should be carefully selected based on both business strategy and legal requirements in the jurisdictions where you operate. Consider consulting with a tax professional to determine the best approach for your specific situation. You can learn more about this [here](/prism/checkout-guides/guides/tax-remittance.md). {% endhint %} --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.violet.io/prism/payments/payment-settings/tax-remitter-settings.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.