With Quaderno, you can calculate sales tax for any country in the world. Quaderno does not collect or file sales taxes for you, but you’ll have all the data you need to collect, register, and file taxes accurately.
Before starting to collect sales tax, VAT, or GST in a country, region, or state, you’re expected to be registered with the respective tax authorities. We always recommend checking with your accountant or tax authority before adding or deleting a tax rate you are collecting.
In Settings > Tax rates, you’ll find all the tax rates you are collecting by tax class. Your account will be automatically configured with the tax rates you are likely to use. You can pre-define different tax rates to be used for your receipts, invoices, credit notes, and expenses.
- Select your default tax class in Settings > Preferences:
- eService – This tax class applies to all digital goods (excluding eBooks). (What is a digital good anyway?)
- eBook – All eBooks. Only electronic publications with ISBNs are considered eBooks.
- SaaS – Some US states consider SaaS applications as a special kind of eService.
- Reduced – Products with reduced tax rates.
- Standard – All other products or services.
- In Settings > Tax rates you'll see a list of tax classes and tax rates. Wondering why you don’t see all countries listed? Not to worry. By default you'll only see your own country (in the case of VAT MOSS, all EU countries). Quaderno will send you an automatic notification when you make your first sale in a country where you could have tax liability. (When do you have to collect taxes in other countries? Read more about tax registration thresholds here).
Everything you need should be automatically set up. If you need to add some special tax rates or other countries, just follow the steps below.
Adding a tax rate
To add a new tax rate, go to Settings > Tax rates and click Create tax. You’ll see the form below:
- Tax class: Select the applicable tax class.
- Country: Choose the country, or countries, in which you will be charging this tax rate.
- Name: You can give your new tax rate a name, e.g. VAT, TVA, IGIC.
- Value: Enter the percentage of your tax rate; e.g. 20 for a rate of 20%. If needed, you can enter up to three digits after the decimal point, such as 15.5 for a rate of 15.5%, or 9.975 for a rate of 9.975%.
- Valid from: Select the date you would like to start applying that tax rate. Quaderno will only apply this tax rate on invoices from this date.
- Valid until: Indicate the date until which the tax rate should be applied. Quaderno won't apply this tax rate on invoices after this date.
- Priority: Choose a priority for this tax rate. Only 1 matching rate per priority will be used. To define multiple tax rates for a single area, you need to specify a different priority per rate.
- Notes: Enter any additional text you want to show up on your invoice when this tax is applied.
Let’s have a look at how this works. For customers from Canada, the store uses different tax rates. There is a 5% tax rate for all Canadian provinces except Quebec, which has both a 5% GST rate and a 9.975% QST rate. Using priorities — priority 1 for the 5% GST rate and priority 2 9.975% QST rate — you can "layer" these rates and apply both of them to your invoice subtotal.