Setting up taxes
As an online seller, you might need to charge taxes on your sales, and then report and remit those taxes to different tax agencies on different tax jurisdictions, where you might need to register your business for tax collection first. You can learn more on “Understanding the tax lifecycle”.
Follow these steps to set up your taxes configuration:
- Billing address: Go to the addresses page and set up your billing address. Quaderno requires this information to calculate your tax liability.
- Default tax and product type: Go to the preferences page and set up your
default tax codeand
default product type. They’ll be used to calculate your tax rates in cases where they’re not specified on a transaction.
- Registered Jurisdictions: Go to the jurisdictions page and set up the tax jurisdictions where your business is registered to collect taxes and has a local tax number. This registration is independent of the countries or states where you sell your products or services.
- Make sure you select
Permanent establishmentwhen your business has physical presence (office, warehouse, etc) in the given jurisdiction.
- You’ll need your
Tax IDfor that jurisdiction and the dates where that Tax ID comes into effect. Usually this is the sales tax permit number, VAT number, GST number, etc.
- For European jurisdictions, another option will be selectable:
Registered in the import scheme. This is a tax scheme the EU offer for foreign sellers of physical goods. You can learn more in our OSS and IOSS schemes article, but you should always confirm your registration status with your tax advisor before configuring it on Quaderno.
- Make sure you select
For Quaderno to calculate tax correctly, you first need to set up the tax jurisdictions where your business is currently registered and has a local tax number. This registration is independent of the countries or states where you sell your products or services.
Do not set up a tax jurisdiction in Quaderno if you are not registered there yet. Collecting taxes before you are registered is illegal.
Here's a quick video to guide you through the process:
Note that we allow to override any tax rates where necessary. However, we recommend using this option only if you need to address unique laws or exceptions. This is usually not needed, as we cover most taxes worldwide. Don’t hesitate to drop us a line and our tax maniacs will help you with that edge case!
You should always check with a local tax authority or a tax accountant to make sure that you charge your customers the correct sales tax rates, and to make sure you file and remit the taxes correctly.
I have added a US state as a jurisdiction. Will Quaderno still calculate the city, district, or country tax in that state?
Yes, when you add a US state as a jurisdiction, Quaderno will calculate the state tax and any city, district, or county taxes on your sales in that state. On your invoices, you will see the sum of all local and state taxes, and you'll see the full breakdown by local jurisdiction in your US sales tax report.
I am registered in the EU OSS / IOSS scheme. Is this considered a jurisdiction?
Yes, if you are registered in the European Union OSS or IOSS scheme, just add the jurisdiction
European Union - OSS / IOSS . Adding it will enable the EU VAT OSS report. For examples and more complex scenarios, please check our EU OSS / IOSS use cases and setup guide.