How to set up VAT and other taxes on your sales
In Payments › Settings › Taxes, choose whether prices include tax, create your rates (for example, VAT 20%) with Add Tax and attach them to products. You can also turn on automatic tax by country.
Updated on
Before you start
- Your user needs access to the Payments settings.
- Have your tax rates and your business tax ID at hand.
- Check with your accountant which rates apply to each product: the system calculates tax, but tax compliance is your business's responsibility.
Where to find it
Payments › Settings › Taxes
Step by step
Choose whether prices include tax
- In the left menu, open Payments, click the Settings tab, then Taxes.
- Under Include Tax in Prices, choose:
- Yes: the price you entered already includes tax (100 stays 100; tax is the portion inside it).
- No: tax is added on top of the price (100 with 10% becomes 110).
Create a manual tax rate
- On the same page, click Add Tax (or Create Tax).
- Fill in the name (for example, VAT 20%), the rate in %, and optionally a description, tax ID number and tax authority.
- Click Add. The rate appears in the list.
Attach the rate to a product
- Open Payments › Products and edit the product (or create a new one).
- Check Attach Tax Rates and choose one or more rates.
- Click Save. The rate is applied automatically on checkouts, payment links and order forms.
Apply tax on an invoice
- When creating or editing a draft invoice, click Add Tax next to the product.
- Check the rate and click Save. The tax is calculated on the invoice.
Turn on automatic tax (optional)
- In Taxes, scroll to Automatic Taxes and turn on Enable automatic tax.
- (Optional) Choose the Default Tax Category that best describes your products.
- Click Add Nexus Address, choose each country where you have a tax obligation and, optionally, enter your tax ID for that country.
- Click Add. Tax is now calculated from the customer's address and shows as a separate line in the payment summary.
Tips
- Each product can have its own tax category and its own "price includes tax" setting (as per global settings, yes or no).
- With automatic tax on, manual rates act as a fallback in countries you haven't added.
Common problems
- The tax rate doesn't show on the invoice → On invoices, tax isn't pulled in from the product automatically: click Add Tax on each line, or turn on automatic tax on the invoice.
- Automatic tax isn't calculated → Check that you added the customer's country as a nexus address and that the customer enters an address at checkout.
- The total has too much tax → Check Include Tax in Prices: if your prices already include tax, choose Yes.
- I want to use only manual rates in one country → Remove that country from your nexus addresses, or turn off automatic tax completely.
Frequently asked questions
Can I have more than one tax rate?
Yes. Create a rate for each percentage and attach it to each product it applies to.
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